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Home My WebLink About1985-0488.Union.86-04-250488185 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD Between: OPSEU (Union Grievance) and Grievor The Crown in Right of Ontario (Ministry of Community and Social Services) Employer Before: P. John Brunner 3. McManus G. A. Peckham Vice-Chairman Member Member For the Grievor: J. Miko Grievance Officer Ontario Public Service Employees Union For the Employer: M . Fleis hman Counsel Crown Law Office Civil Ministry of the Attorney General Hearing September 19, 1985 ! -2- DECISION The question raised by this grievance, which is brought by the Ontario Public Service Employees Union (hereinafter referred to as the Union) and is dated April 19, 1985, is whether interest is payable by the Crown in Right of Ontario (Ministry of Community & Social Services) (hereinafter referred to as the Employer) on the principal amount of certain late payments of shift premiums to employees at the Oxford Regional Centre in the City of Woodstock. At the opening of the hearing, Counsel for the Employer raised a preliminary objection as to the Board's jurisdiction to award interest in general. By agreement between both Counsel, argument on that issue was postponed until the conclusion of the entire case when submissions on both the merits and the jurisdictional question were addressed. Thefacts may be summarized as follows. The Oxford Regional Centre is a mental rehabilitation facility located in the City of Woodstock. It employs approxi- mately 850 full time and part time, as well as casual employees, who work on three shift schedules. Under Article 11.1.1 of the Collective Agreement, employees who ~work between the hours of 5:00 p.m. and 7:00 a.m. are entitled to receive a shift premium. -3 - "ARTICLE 11 - SHIFT PREMIUM 11.1.1 11.1.2 11.2 11.3 .It is to be noted that neither Article 11 nor any of the An employee shall receive a shift premium of thirty-five cents (35C) per hour for all hours worked between five (5:OO) p.m. and seven (7:OO) a.m. Where more than fifty percent (50%) of the hours fall within this period the premium shall be paid for all hours worked. Effective January 1, 1983, the shift premium payable under sub-section 11.1.1 shall be forty cents (4OC) per hour. Shift premiums shall not be considered as part of an employee's basic hourly rate. Shift premium shall not be paid to an employee who for mutually agreed upon reasons works a shift for which he would otherwise be entitled to a shift premium." other provisions of the Collective Agreement stipulate a time at or a period within which the shift premium is to be paid. The evidence is that over the past several years, employees at the Oxford Regional Centre have received their shift premium entitlement within approximately one month of the date that they were earned. However, this has not been the uniform practice of the Employer. Employees at other institutions are paid at various frequencies which range from once a month to twice in one year. I Shift premium calculations at the Oxford Regional Centre are made by a financial officer and two full time clerks. However, payment must be requisitioned from offices in Toronto where cheques for this and other employee benefits, as well as salary, are prepared and then delivered to the financial officer. The evidence is that there was a substantial delay in the calculation of shift premium entitlement for the period November 19, 1984 to February 24, 1985. They were not completed until March 13, 1985, when the requisite forms were forwarded to Toronto. However, payment was not made until April 18, 1985. The reason for the delay was that the financial officer and his staff were most pre-occupied with the processing of a substantial retroactive salary increase that the Employer and the Union had negotiated. Under the terms of the.settlement, payment of the increases had to be made by February 6, 1985, in default of which, interest on any unpaid amount became payable by the Employer. High priority was therefore given to the matter of salary increases and other work, including that of the calcul- ation of shift premiums, was delayed. However, employees were not requested to work overtime and no part time or casual employees were trained and assigned to any of these tasks. Complaints by employees and Union representatives were periodically made, but as we have stated, the shift premiums were not received by the employees until April 18, 1985. On these facts, we turn to the question whether the Employer is liable for interest on the principal amount of the late shift premium payments. The general rule is that interest is given by law in the following circumstances: 1. Where it is stipulated for by contract, express or implied; 2. Where it is provided for by statute or by rule of Court; 3. Where a custom or a trade or mercantile usage c.alls for it; 4. As damages for breach of contract: 5. For the wrongful withholding of money; or 6. Where the payment of a just debt has been improperly. withheld and it seems to be fair and equitable that the party in default should make compensation by payment of interest. See generally 8 C.E.D. (3d). "Interest on Debts”, pages 43 and 44, Dominion Chain Limited v. Eastern Construction Limited, (1974) 3 O.R. (2d) 481 (H.C. of J.); 12 O.R. (2d) 201 (C.A.): I19781 2 S.C.R. 1346 (S.C.C.)., - 6 - ! As we have already stated, there is nothing in the Collec- tive Agreement which stipulates a time at or a period within which shift premiums must be paid. Article 11, which deals with the subject matter of shift premiums, is completely silent on this subject. This is to be contrasted to "overtime" which by Article 13.3.2 must be paid within two months of the pay period in which the overtime was worked. It is accordingly clear that the late payment of the shift premiums did not constitute a breach of any express term of the Collective Agreement. It was not contended by Counsel that a term should be implied requiring the payment to be made within a reasonable time from the date that the shift premium entitlement arose. Accordingly, it would not be proper for this Board to address this question. However, even if we were to assume without deciding, that such a term should be implied, we are satisfied that in the circumstances there has been no breach. The payroll department was confronted with an unusual situation, the result of recent negotiations between the parties which required the calculation and processing of retroactive pay increases for hundreds of employees. By the terms of the settlement, this had to be effected prior to February 6, 1985, on pain of the payment of interest. In the circumstances it was reasonable for the financial officer and his staff to give priority to the question of salaries and leave the processing of shift premiums to a later date. - 7 - I On the evidence before us, we are not prepared to find that the delay jn the assembly of information and the calculation of the shift premiums until March 13, 1985, was unreasonable and constituted a breach of such an implied term. As to why it took until April 18, 1985, for the cheques to be.delivered to the indiviaual employees, there is really no explanation. However, it appears from the evidence before us that a period of three to four weeks for this process was not unusual. Accordingly, we are of the opinion that the late payment of shift premiums did not constitute a breach of any express or implied term of the Collective Agreement. It was not seriously contended that there was anything in the Collective Agreement which stipulated for the payment of interest or that it was so provided by any statute or rule of Court. There is certainly no custom of trade or mercantile usage which is relevant.and as we have said, there 'was no breach of the Collective Agreement and for the reasons expressed, no "wrongful" withholding of money. Nor is this a case where the payment of a just debt has been improperly withheld and it seems fair and equitable that the party in default should make compensation by payment of interest. Accordingly, as a matter of law, interest is not payable and there is no liability for it on the part of the Employer. -8- , Before leaving this matter we should state that we have not found it necessary to address the question of the jurisdiction of the Grievance Settlement Board to award interest in an appropri- ate case. Nothing in these reasons accordingly should be taken as an expression of opinion on this matter, which in our view should be left to another day when the issue squarely arises. For these reasons, the grievance fails on its merits and is dismissed. DATED at Toronto this 25th day of April, 1986. 3 - - R, VICE CHAIRMAN (dissent attached) J: MCMANJS, MEMBER i-7 G. A, PECKHAM, MEMBER OPSEU (Union Grievance) and The Crown in Right of Ontario (Ministry of Community and Social Services) DISSENT OF UNION NOMINEE I disagree with the majority decision. The Board ought to have decided that there was a breach of an implied term, said term requiring the payment to be 'made within a reasonable time from the date that the shift premium entitlement arose. On the evidence, it is clear to me that the Employer did not make a reasonable effort to overcome the workload problem in the payroll department. As the majority decision states " . . employees were not requested to work overtime and no part .time or casual employees were trained and assigned to any,of these tasks." I would have upheld the grievance and awarded interest. For future cases,1 think it is important to note that the majority decision does not rule on either the broad issue of implied terms or on the question of jurisdiction to award interest