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HomeMy WebLinkAbout1998-0320.Union.98-08-25 Decision ONTARIO EMPLOYES DE LA COURONNE ( CROWN EMPLOYEES DE L'ONTARIO 111111 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/MILE/TELECOPIE (416) 326-1396 GSB # 0320/98 OPSEU 98U073 IN THE MA TIER OF AN ARBITRA nON Under THE CROWN EMPLOYEES COLLECI1VE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN OPSEU (Umon Gnevance) Grievor - and - The Crown III Right of OntarIo (Mimstry of TransportatIOn) Employer BEFORE N Dlssanayake Vice-Charr FOR THE Gavm Leeb UNION Gnevance Officer Ontano Public SefVlce Employees Umon FOR THE Malliha Wilson EMPLOYER Counsel, Legal SefVlces Branch Management Board Secretanat HEARING August 13, 1998 2 DECISION This is yet another "reasonable efforts" case, but very different from any of the prevlous cases dealt with by the Board in that the reasonable efforts lssue is being raised at a point when the privatizatiorr process has proceeded further along than in any prevlous case Some factual background lS required to put the grlevance into context The Ministry of Transportation issued 6 area malntenance contracts with a view to privatizing certain work hitherto performed by OPS employees, work such as road patrol, road surface and shoulder maintenance, drainage and vegetation management A Request For Proposals (RFP) was issued on May 27, 1998 According to the employer's understanding of its obligations as gleaned from previous "reasonable efforts" decislons of the Grievance Settlement Board, the employer included three parts in the Human Resources Factor (HRF) of the RFP, namely, Mandatory Requirements, Rated Requirements and the Human resources Incentive Fund Any proposal that did not meet each of the mandatory requirements was to be disqualified The mandatory requlrements were The proponent was required to make job offers to all OPS employees affected by the privatization, such job offers had to include at least 85% of each employee's current OPS salary, Each employe~'s service with the OPS had to be recognized for purposes of vacation and benefits, and a job offer could not include any probationary perlod 3 The Rated Requirements were designed to give proponents points for offering certain specified terms and condltions For example, any offer of salary In excess of 85% of the employee's current OPS salary would earn a proponent a number of points to a maximum of 25 Similarly a proponent could receive up to 15 points for offering group benefits such as Basic Life, Short Term Sickness Plan, Long Terms Insurance Plan, Health and Dental Plans etc It lS to be noted that the HRIF stage of the HRF came into play after the successful proponent had been selected based on the Mandatory and Rated Requirements It lS envisaged that the Mlnistry would have at its disposal a sum of money equal to the amount it would save by not having to pay enhanced severance pay to the OPS employees affected by the RFP The Ministry was to enter lnto negotiations with the successful proponent, uSlng these funds to enhance salary and/or other terms and conditions of employment and/or to obtain recognition of seniorit./, in order to fulfill its "reasonable efforts" obligation Pursuant to this RFP the Ministry selected a company called Integrated Maintenance and Operatlons Services Incorporated (IMOS) as the successful proponent IMOS consisted of 6 shareholder companles, which had a combined workforce of between 3500 to 4000 employees 41 Ministry employees were included In the RFP as affected employees However, subsequently 2 were removed The r,emalnlng 39 employees were . to be transferred to a company known as Miller Maintenance, one of SlX companles in the IMOS Group The existing Miller workforce was not unionized 4 Following the announcement of the successful proponent, the unlon filed a grlevance dated May 31, 1998 alleging that the Ministry had violated Appendix 9 of the collective agreement with regard to the 6 Area Maintenance contracts "Minutes of Settlement and Release" were executed on June 26, 1998 with regards to this grlevance The relevant portion reads The parties agree to resolve all matters arislng out the grievance referred to by GSB #0320/98 and OPSEU #98U073 on a without prejudice and precedent basis as follows 1 The Ministry will be permitted to close its call for tenders/RFP's, evaluate, announce the preferred bidder and begln implementation wlth regard to the following Area Maintenance Contracts These AMC's will close on the dates specified below (a) AMC 98-01 July 8th, 1998 (b) AMC 98-02 July 8th, 1998 (c) AMC 98-03 July 8th, 1998 (d) AMC 98-04 July 8 th 1998 , (e) AMC 98-05 July 22, 1998 (f) AMC 98-06 July 22, 1998 2 OPSEU agrees that the mandatory criteria and the HRF evaluation criteria lncluded In the AMC's are sufficient to meet the Ministry's reasonable efforts obligations up to that part of the process and releases the Ministry from all liability in relation thereto 3 The parties agree that the Ministry remains obligated to negotiate with regard to the HRIF as stlpulated in the RFP Therefore, the parties agree to the following process in relations thereto Wlth regard to AMC's (a) to (d) , OPSEU will be provided with a 5 day period between August 10 and 31, 1998 withln which to review the efforts that the Ministry has undertaken In relation to the HRIF If OPSEU has any concerns with r.egard to the Ministry's efforts In relation thereto, OPSEU may refer the matter to mediation/arbitration within that 5 day tlme period and the manner must be dealt with and completed within this time frame 1 5 with regard to AMC's (a) and (f) , OPSEU will be provided with a 5 day period between August 24 and September 11,m 1998 within which to reVlew the efforts that the Ministry has undertaken in relatlon to the HRIF If OPSEU has any concerns with regard to the Ministry's efforts in relatlon thereto, OPSEU may refer the matter to mediation/arbitratlon within that 5 day tlme period and the matter must be dealt with and completed within this time frame Subsequently on July 27, 1998, the Ministry entered into HRIF negotiations and came to an agreement with IMOS as to terms and conditions of employment for the 39 Ministry employees who were being made job offers On August 10, 1998 the union was provided a copy of the agreed to terms and conditions which were eAecuted on August 9 The union did have concerns about the "reasonable effortsN on the part the Ministry and those concerns were referred to the GSB pursuant to Para 3 of the Minutes I was seized with the union's concerns as they related to 4 of the 6 Area Maintenance Contracts When the Board convened on Thursday August 13, 1998, the parties agreed to a Med-Arb process I spent the morning attempting to mediate a settlement but was not successful The arbitratlon hearing commenced at 2 00 P m At the urging of the parties, I agreed that a decision would be issued no later than Monday August 17, 1998 A "bottom-lineN decision dismissing the grlevance was issued on August 17, 1998 wlth written reasons to follow This decisic;m sets out those written = reasons 6 The union submitted that 1t had a "fundamental concern", as well as "lesser concerns" about the employer's efforts with regard to its obligation under Appendix 9 of the collective agreement The relevant portions of that appendix are as follows The Government is aware that its restructuring initlatlves over the nex~ two fiscal years (1996/97, 1997/98) could have a significant effect on employee, some of whom have served for a lengthy period Accordingly, corrnnenc1ng with the ratification of the collect1ve agreement and ending on December 31, 1998, the Employer undertakes the following 1 (a) The Employer will make reasonable efforts to ensure that, where there 1S a disposition or any other transfer of bargalning unit functions or jobs to the private or broader public sectors, employees ln the bargaining unit are offered posltions with the new, employer on terms and conditions that are as close as posslble to the then ehisting terms and conditions of employment of the employees 1n the bargaining unit, and, where less than the full complement of employees 1S offered positlons, to ensure that offers are made on the baS1S of senlority When an employee has been transferred to a new employer he/she will be deemed to have resigned and no other provisions of the collective agreement will apply except for Article 53 or 81 (Termination Pay) (b) Where the salary of the job offered by the new employer is less than 85% of the employee's current salary, or if the employee's service or seniority are not carried over to the new employer, the employee may decline the offer In such a case, the employee may exercise the rights prescribed by Artlcle 24 and/or paragraphs 2 to 5 of this letter The employee must elect whether or not to accept employment with the new employer within three (3 ) days of receiving an offer In default of an election, the employee shall be deemed to have accepted the offer Counsel for the union conceded that he,re the Ministry had gone a .r long way towards fulfilling its reasonable efforts obligation under the Appendix Nevertheless, he took the position that there was a fundamental flaw in that the Ministry did not take reasonable steps to - 7 ensure that the OPS employees who accept job offers with IMOS have a job guarantee for any length of time As he put it "any of these 39 employees can be terminated the day after they start" He suggested that the Ministry should have provided a job guarantee for a minlmum period of 6 months The other aspect of the union's fundamental concern about job security was that the Ministry had not obtained a guarantee that the OPS employees hired by IMOS would continue to have year-round full time employment He submitted that Slnce some of the OPS work transferred to IMOS was seasonal In nature, eg The zone painting, there was the real risk that employees performing that work may not have year round employment Counsel submitted that job security was of paramount importance to these employees, both in terms of having contlnuing employment and having year-round full-time employment He took the position that any agreement negotiated without addressing job security could not be the result of reasonable efforts contemplated by the collective agreement Counsel pointed out that In the OPS these employees had an assurance that where there lS a layoff they would receive 6 months notice or pay in lieu of notice He contends that in order to satisfy the reasonable efforts obligation, the Mi:nistry must, at a minimum, obtain the 6 month notice or pay in lleu, currently enjoyed by employees under article 20 2 8 Counsel conceded that the Ministry spent a considerable amount of time negotiating with regard to the HRIF Howeverr he submits that the result was questionable From that he contends that the ministry should have used other incentives beyond the HRIF funds that had been allocated to negotiate better terms and conditions of employment He argues that the Ministry was not restricted to the HRIF amount when it negotiated to enhance terms and conditions with the successful proponent, and that if it required more money as leverage, that money should have been made available The "lesser concerns" the union raised had to do with short term sickness (STIP) , Long-term disability insurance (LTD) and over-tlme There was no STIP provided for the employees The only provision In this regard was that when the new payroll system became operational In the year 2000 IMOS undertook to make provision for banking of sick time IMOS did have a LTD plan However, it provided only for 60% of the wages, whereas the OPS plan provlded for a rate of 66-2/3% In the OPS overtime rates were payable beyond 40 hours per week IMOS agreed to pay overtime rates only for hours in excess of 55 hours a week The employer's primary positlon is that job security is not a term or condition of employment contemplated by the reasonable efforts provision In any event, counsel submits that with the limited HRIF funds available as leverage, there was no clout In the Ministry to - persuade IMOS to agree to what the union wants with regard to STD, LTD and overtime, employer counsel submitted that the Ministry did its best to persuade IMOS to improve the benefits, but was not successful 9 Counsel submitted that at the stage of HRIF negotiations the ministry's clout was at its weakest as compared to the mandatory and rated requirement stages and that all it could do was to use the HRIF money to try to convince the proponent In this case the Ministry did so, and was successf1.}l in improving many terms and conditions, but was not as successful In other areas That, however, did not mean that the Ministry did not make reasonable efforts The Board notes that it lS important to be aware of the stage at which the reasonable efforts obligation is under review here This lS because the Board has recognized that " just as much as what constitutes reasonable efforts will vary from case to case, what steps the employer lS reasonably requlred to take pursuant to the obligatlon may vary during the various stages of the divestment process " Re OPSEU & MBS - Union Grievance re Mobile Communications, 1712/97 (Dissanayake) In this regard the Memorandum of Settlement executed by the parties to thls grievance plays a central role The union has clearly agreed in the minutes that the Ministry has met its reasonable efforts obligation as far as the mandatory and the evaluatlon criteria (rated requirements) stages are concerned (para 2 ) Para 3 sets out the remalnlng obligation on the Ministry as "to negotiate wlth regard to the HRIF as stipulated In the RFP" It is common ground that for the 4 contracts under consideration, the "HRIF as stipulated In the RFP" amounted to approximately $ 400,000 00 The Minlstry used up approximately half of " that amount during HRIF negotiations to obtain improvements in terms and condltions of employment In a number of areas That left the Ministry approximately $ 200,000 00 of HRIF money to attempt to obtaln " 10 enhancement In other terms and conditions Having agreed In Para 3 that the employer's remaining obligation was to negotiate wlth regard to the HRIF as stipulated in the RFP, it lS not open for the unlon to argue that the Mlnistry should have made additional funds available if that was what was required to persuade IMOS to agree to terms and cc;mdi tions equal to those In the OPS There lS no question that the employer had a continuing obligation to make reasonable efforts to obtain terms and conditions "as close as posslble" even during the HRIF negotiations However, in this case, the reasonableness of the Ministry's efforts must be judged In light of the HRIF amount In the RFP, because that was the only leverage the parties had expressly contemplated at this stage The end result at the conclusion of the HRIF negotiations was that every OPS employee affected by the RFP was guaranteed a job offer The job offers included the following On average the wage rate amounted to approxlmately 95% of the OPS salary levels, Senlority was recognized for purposes of benefits and layoff/recall, a salary progresslon scheme was provided for, there was to be no probation period for OPS employees with the new employer, a comparable vacation package was made available, service accrual was provided during absences due to pregnancy, compensable injury and LTD, a no discrimination/harassment policy was provided, the IMOS hiring practices were amended to reflect article 6 of the OPS collective agreement, a LTD plan which provided benefits within 6-2/3% of the rate currently available was provided, banking of sick time was assured starting in 2000, a neutral dlscipline process was provided, just cause was required for discharge, bereavement and 11 compassionate leave was made avallable, a health and safety provision was provided, a premium holiday was granted for group benefits The union concedes that the Ministry worked conscientiously, having regard to previous directlons from the GSB, to obtaln these terms and conditions However, it contends that the Ministry still fell short in its reasonable efforts obligation wlth regard to job security, STIP, LTD and overtlme pay Mr Brlan Riddell, President of IMOS, testifled about the negotiations between the Ministry and IMOS He stated that the possibllity of glving the OPS employees a comparable 6 months notlce/pay in lieu was considered, but was unacceptable to IMOS He testlfied that if such a provision was extended to these 39 OPS employees, it had to be extended to the rest of the IMOS workers That would be a financial burden the company could not live with, particularly In Vlew of the limited HRIF funds the Ministry was willing to make available Mr Riddell also stated that another concern was that employees may choose to resign early during the 6 month period IMOS felt that could leave It In a position where It would be impossible to fulfill the terms of its contracts He testified that if job security had been made a mandatory requlrement, he would have had to carefully consljer whether he was going to bid on the RFP Mr Piddell testified that during negotia-tions the provlslon of some form of STIP plan was discussed IMOS could not agree to it for the same reason that it was not fair to extend such a benefit to 39 out \ 12 of a much larger workforce Extending it to the whole workforce was not an option because it would be a prohibitive expense with regard to LTD, the IMOS workforce currently had insurance providing for benefits equal to 60% of wages and IMOS agreed to extend the same to the 39 OPS employees It was not in a posltion to undertake an increase the benefit level because It had to be done for all employees Such an ongoing expense was not acceptable Mr Riddell pointed out that Miller Maintenance was operating In the Road Maintenance Industry covered by Regulation 325, section 15 1 under the Emolovment Standards Act, which explicltly permits employers in road maintenance to pay overtime after 55 hours in a week That was the province-wide industry standard, and the standard applied to the Miller Maintenance workforce Paying overtime to the 39 OPS after 40 hours would be inconsistent with this industry standard and the additional cost on a contlnuing basls was too much Mr Riddell testified that for those reasons, IMOS was not willing to enhance its overtime pay policy, although It did agree to provide for overtime banklng once the new payroll system becomes operational in 2000 In Re OPSEU and Ministrv of Transoortation, 1344/96 (Kaplan) , the Board dealt with a reasonable efforts case between these same parties with regard to 3 other Area Maintenance Cont~acts In criticizing the = approach taken by the employer, at pp 32-33 the- Board stated In the meantime, however, the fact of the matter lS that the HRF did not in this case, problems in calculatlon aside, make a difference and this must, at a very mlnlmum, lead to the 13 active reconsideration of the overall approach While the employer asserted that it was impractical, if not impossible, for legal and other reasons, to engage in negotiations wlth a Proponent after a bid was successful, this is not a conclusion that the evidence or the authorities leads me to accept Quite clearly, there lS nothing stopping the employer from including in its RFPs the possibility of negotlating with successftJl Proponents In some clrcumstances, such as where, for example, the entire amount of the enhanced severance savings were not attrlbuted as a bid preference, there would be room, taking the employer's case at its highest, to provide further inducements and still avoid the penalty part of the provision Put another way, assuming for the sake or argument, and accepting only for the sake of argument, that the employer's obligation to provide a flnancial incentive lS limited to the savlngs on enhanced severance that it could reallze, there may be cases where only a part of the enhanced severance savlngs were glven as a bid preference and a successful proponent identified What, one must ask, would stop the employer from negotiating with the proponent after the competition was closed using the balance of the amount to help its employees find jobs and/or to lmprove the terms and conditions of jobs which were offered? The answer to this question, it seems to me, lS nothing In this case, an opportunity to help employees get even better jobs was lost by the employer's self-imposed restriction on negotiatlng with the successful Proponent This lS yet another reason for finding for the union In that case, the Board did not decide whether the employer's obligation to provide a financial incentive was limited to the savlngs on enhanced severance Here, the union maintains that It lS not so limited However, regardless of the extent of the Ministry's obligation generally, In the Minutes of Settlement of this grievance the parties have agreed to what the Ministry's remaining obligation was It was to negotiate with regard to the HRIF "as stipulated in the RFP" It lS ~ cornmon ground that the Minlstry made available that amount stlpulated in the PFP Therefore, there was no obligation on the Ministry to provide anything more If the Ministry made reasonable efforts uSlng 14 that money to negotiate enhanced terms and conditions of employment, it would have met its legal obligation The Board agrees with the Ministry counsel that the extent of the Ministry's clout In seeking enhancement of terms and conditions gets progressively weaker as the divestment process moves from the Mandatory Requirements stage, to the Rated Requirements stage and to the HRIF negotiations stage In response to the Ministry's argument that wlth the available HRIF funds the Ministry would have had no way of persuadlng IMOS to provide for job security, unlon counsel submitted that, if that was so, the Ministry should have included job security as a mandatory requirement, because it was of such fundamental importance to the OPS employees Whether or not that position has merit generally, there is no room for that argument in this case in view of Para 2 of the Mlnutes of Settlement, where the union has agreed that Ministry has met its reasonable efforts obligations as far as the Mandatory and Rated Requirements were concerned The Board also agrees that there is no term of employment currently enJoyed by OPS employees, wherein they are guaranteed contlnulng employment or full-time year round employment for any length of time If legitimate buslness reasons require a reduction of the workforce the employer lS entitled exercise its management rlghts Its obllgation lS to follow the process specified In 'the collective agreement, -- specifically article 20 To that extent, the right to notice of layoff and pay in lieu of notice lS a term of employment whlch came wlthin the reasonable efforts obligatlon 15 The evidence is that the Ministry had at its disposal approximately $ 200,000 00 left in the HRIF The issue of the SlX month notice of layoff was raised at the HRIF negotiatlons For reasons elaborated during hls testimony, Mr Riddell would not agree to provide for that term His primary concern was the cost, which in his Vlew far exceeded any amount the Ministry had to offer He was concerned about the ripple effect - how he could avoid extending the same terms to the existlng workforce of 3500-4000 He was concerned about setting a precedent within the IMOS group of companles Whether or not Mr Riddell's concerns were well-founded lS not the issue The lssue lS, was there something the Ministry could have reasonably done to persuade Mr Riddell and IMOS, given the amount of HRIF funds it had in reserve? The union did not point to anything the Ministry could have done at this stage of the process The Board is satisfied, having regard to the clout the employer had at this stage and the limlted HRIF funds at lts disposal, that the Ministry has not breached its reasonable efforts obligations The same considerations are applicable with regard to STIP, LTD and overtime pay In regard to STIP, the unlon suggested that If a term providing beneflts on an indefinite basis was not attainable, the Ministry could have allocated a bank of sick days to each of the 39 OPS employees on a one-time basis to the extent that the remaining $ -- 200,000 00 In the HRIF fund allowed Mr Riddell agreed that the Ministry did not make such a suggestion He indicated that if ...... was lL- suggested, he would have considered it However, does the fact that the .. 16 Ministry did not make that suggestion constitute a failure to make reasonable efforts within the meaning of Appendix 9? I do not thlnk so The STIP benefit presently enjoyed by OPS employees under article 44 lS for sick pay at 100% of regular salary for the first 6 days of absence and at 75% fer an additional 124 days of absence It lS a contlnuing benefit The union's suggestion lS a creative one whlch would have provided the employees some benefits for a very llmited perlod, whlch lS obviously better than no beneflts In those clrcumstances the fact that the Ministry did not think about the creative solution as the unlon did cannot be held to be a breach of the employer's reasonable efforts obligation There is no evidence before the Board as to what opportunity, if any, the union had to make suggestions to the Minlstry as to how the HRIF may be used during negotiatlons There lS no indication that the unlon made the suggestion it now makes to the employer at any tlme prior to the flling of the grlevance In Re OPSEU v. MOT (suora) at p 30, Vice-Chair Kaplan stated as follows as to what the reasonable efforts obligation means I am In complete agreement with employer counsel that reasonable efforts does not mean "all efforts" It does not mean "efforts to the point of undue hardship" It does not mean "every effort" What it means is efforts that are reasonable in the circumstances all things considered What is reasonable in the circumstances will, obviously, depend on the facts of particular cases In my view, to find a breach because the employer did not consider a novel and creative solution the union was 9ble to come up with, would be to hold the Ministry to a higher standar-(j of "all efforts" or "every effort" That lS not what lS contemplated by "reasonable efforts" . " 17 The Board is satisfied that the Ministry made reasonable efforts during the HRIF negotiations stage considering the partlcular circumstances it faced Using the funds available, the Mlnistry was able to enhance a number of terms and conditions In some others it was not as successful That was not indicative of a fallure to make reasonable efforts This grlevance lS hereby dlsmissed r~Ov Dated this ;r(th day of August 1998 at Hamilton, Ontario ~ Nimal V Dissanayake Vice Chairperson --