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HomeMy WebLinkAbout1985-1167.Dotzenroth.88-01-18Between: IN THE MATTER OF-AN ARBITRATION Under THE CROWN EMPLOYEES COLLETIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD OPSEU (S. Dotrenroth) .Grievor and The Crown in Right of Ontario (Ministry of Correctional Services) Before : J. Forbes-Roberts Vic.e-Chairman I.J. Thomson Xember F. Collict Member For the Griever: Chris. C. Paliare Counsel Gowlinp & Henderson Barristers & Soiicitors For the frr.pioyer: Lynn Horton Staff Relations Officer Staff Relations Branch Management Board of Cabinet Hearing: July 16, 1987 1167185 Employer ,‘i 7 DECISION A grievance~was filed in this matter, and a hearing was held on July 16, 1987. The claim is novel. The grievor is classed as a Psychologist I and has been with the Ministry of Correctional Services since May of 1980. In the spring of 1983 the grievor sought and was granted maternity leave commencing January 2, 1984 - a particularly auspicious commencement date in that her son was born on January 1, 1984. The collective agreement between the parties makes specific provision for a supplementary unemployment benefit plan in the event of a maternity leave.~ The relevant provisions of the ' agreement are printed below: 49.3.1 An employee entitled to maternity leave under this Article, who provides the Employer with proof that she has applied for and is eligible to receive unemployment insurance benefits pursuant to Section 30. Unemployment Insurance Act, 1971, shall be paid an allowance in accordance with the Supplementary Unemployment Benefit Plan. 49.3.2 In respect of the period of maternity leave,' payments made according to the Supplementary Unemployment Benefit Plan will consist of the following: (a) for the ,first two (2) weeks,~ payments equivalent to ninety-three percent (93%) of the actual weekly rate of pay for her classification, which she was receiving on the last day worked prior to the commencement of the maternity leave. and (b) up to a maximum of fifteen (15) additional weeks, payments equivalent to the difference between the sum of the weekly UIC benefits the employee is eligible to receive and any other earnings received by the employee, and ninety-three percent (93%) of the -l- , r -2- . actual weekly rate of pay for her classification, which she was receiving on the last day worked prior to the commencement of the maternity leave. Suffice it to say that the grievor qualified pursuant to Article 49.3.1 for the Supplementary Unemployment Benefit Plan ("S.U.B. Plan") as set out in Article 49.3.2. It is undisputed that at the time the grievor duly received payments . in accordance with the formula set out in Article 49i3.2. $ The grievor filed her 1984 Tax Return and in May of 1984 received a Notice of Assessment. Because her net income exceeded $33,150.00, she was required to pay back $988.80 of the U.I.C. benefits she received. This was pursuant to Article 142 of the Unemployment Insurance Act~which states: Liability 142. Where the income of a for benefit claimant (in this Part repayme.-&t referred to as the "claimant's income") for a taxation year exceeds an amount that is one. and one-half times the maximum. yearly insurable earnings, the claimant ~shall, on or before April 3.0 in the next year, pay to the Receiver General an amount that is thirty per cent of the lesser of (a) the total benefits paid' to the claimant in the year: and (b) the amount by which the claimant's income for the year exceeds an amount that is one and one-half times the maximum yearly insurable earnings. The operative portion was Article 142 (a). -3- . The Union urges that to fulfill its obligation under Article 49.3.2 the Employer is liable for the $988.80, plus interest. The Employer maintains that it has completely discharged its obligations under the agreement, and is not liable for the grievor's'statutory obligations. The entire debate hinges on the meaning to be ascribed to the phrase in Article 49.3.2 (b) the "... U.I.C. benefits the employee is eligible to receive..." (emphasis added). Put shortly, is "eligibility" determined at the time of actual payment, or at the end of the taxation year? The union maintains that the level of eligibility can only be determined after all tax ramifications have been taken into account. We reject this view. On its face the language is clear. Article 49.3.2' (b) speaks of the U.I.C. benefits the employee is eligible to receive, not the benefits she will ultimately - prove eligible to have received. The Employer is required to supplement an employee's U.I.C. benefits plus any other source of income to maintain the 93% salary level. <Income tax ramifications are not the Employer's responsibility. , Having received the 93% salary, how the recipient protects that income is up to her - just as if she .' had received 100% salary. The Employer cannot be expected to assume the role of a tax shelter. One must take the Union's argument to its logical , ; ? , - 4 - conclusion. Assume that an employee in a low salary.range takes maternity leave and avails herself of the SUB plan. Her yearly wage including the 17 weeks at 93% salary does not exceed $33,150.00 However, in the taxation year in which she takes the maternity leave she receives a windfall in the form of a $20,000. inheritance, which puts her income over $33,150. Consequently she is assessed pursuant to Article 142 of the Unemployment Insurance Act. By the Union's lights the Employer would be liable forjthe sum of the assessment. This surely cannot be the plan's purpose. The grievance is hereby dismissed. Dated at Toronto, this 18th day of January, 1988. J. Forbes-RobertsVice-Chairman (Addendu;: artachrd) ADDENDUM This member agrees completely with the award in thi$ case. One additional simple illustration, however; may serve to further clarify the award. The collective,agreement between the parties incorporates the salaries that will be paid to all government employees. If one follows the Union’s argument in this case, the government would be responsible for ~the payment of the income tax for all employees because the employer had “.failed* to meet its obligation of ensuring that an employee received the salary set out in the collective.agreement. In fact, the Union’s argument, literally taken, would provide .that the employer had failed to meet its obligation not only at year end, as in the subject case, but also every pay day owing to the employ- er’s statutory tax requirement to deduct income tax at source. AS in this case, however, the action of the employer in ful- filling its obligations under the collective agreement is the end of it. The employer is not responsible for the griever’s statutory obligations.