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 SETTLEMENT BOARD
BETWEEN
Ontario Public Service Employees Union
(Tilden)
Grievor
- and -
The Crown in Right of Ontario
(Ministry of Municipal Affairs and Housing)
Employer
BEFORE Nimal Dissanayake Vice Chair
FOR THE Alick Ryder
GRIEVOR Counsel Ryder, Wright, Blair & Doyle Barristers & Solicitors
FOR THE Liane Brossard
EMPLOYER Counsel, Legal Services Branch Management Board Secretariat
HEARING January 28, 2000
Supplementary Decision
The Board issued its decision in this matter on October 19, 1998, wherein it concluded that the Employer had, inter alia, contravened the collective agreement by failing to assign the grievor to an available position for which he had qualifications. The Board directed that the employer appoint the grievor to the position retroactively to the time when he should have been assigned and to compensate him for all losses.
The board reconvened on January 28, 2000 to deal with a dispute between the parties as to the appropriate amount of interest payable to the grievor on the amounts owing pursuant to the award.
Factual Background
The facts are not in dispute. Following the Board’s decision dated October 19, 1998, Ms. Marcia Grimes, Senior Human Resources Advisor, sent to the grievor a cheque in the amount of $ 20, 000.00 with a letter dated November 4, 1998, describing the cheque as an interim payment on the Grievance Settlement Board award. It appears that this cheque was promptly cashed by the grievor.
On November 9, 1998, the employer wrote to the grievor advising that effective November 16, 1998 he was assigned to the position in compliance with the Board order.
On December 21, 1998 Mr. Alick Ryder, union counsel, wrote to Ms. Liane Brossard, employer counsel, inquiring about the calculation of the compensation owing to the grievor. He further wrote: Would you also please have your client provide us with a further down payment on the ultimate award. I am suggesting 80% of your client’s calculation.
On December 24, 1998, Ms. Grimes enclosed a cheque in the amount of $ 106,716.69 with the following letter to Mr. Ryder:
Please find a cheque for Mr. Ken Tilden in the amount of $ 106,716,69 which represents full and final payment on the Award in relation to GSB numbers: 2109/95, 2111/95, and 2112/95. As you know an interim cheque in the amount of $20,000 was forwarded to your office on November 4, 1998 on his behalf.
I have attached a breakdown of the applicable deductions as prepared by our payroll office. This breakdown includes full reinstatement back to November 1995 up to November 1998 when Mr. Tilden started employment with Ontario Realty Corporation.
Please acknowledge receipt of this cheque and forward it to Mr. Tilden.
By letter dated January 4, 1999, Mr. Ryder wrote to Ms. Brossard, We do not accept the above cheque as representing compliance with the Board’s award. Counsel reviewed in the letter
a number of areas of compensation still to be determined such as interest and income tax top-up. He closed his letter by writing:
In view of the terms of your client’s letter Mr. Tilden has not cashed the cheque. Would you please confirm that you have no objection to his cashing the cheque without compromising his right to assert the balance of his award.
It is agreed that on January 12, 1999, Ms. Brossard called Mr. Ryder’s office and left a voice-message assuring that the grievor may cash the cheque for $106,716.69, without prejudicing his right to claim any additional amounts of compensation. In a letter dated January 13, 1999, Mr. Ryder acknowledged the receipt of the message by writing,
Thank you for your voice message of yesterday advising that it was in order for Mr. Tilden to cash your client’s recent cheque without waiving his rights to claim additional monies in order to recover his full entitlement under the Board’s Award.
Despite the receipt of the assurance he sought, union counsel returned the cheque in question to the employer with a letter dated March 11, 1999 which stated, Until the outstanding issues relating to the calculation of the compensation in this matter have been determined by the Board, Mr. Tilden is not prepared to accept the cheque in the amount of $106,716.69. We are therefore returning the cheque to you for delivery to your client.
On March 23, 1999, Ms. Brossard wrote again to Mr. Ryder, stating, inter alia:
I acknowledge receipt of your letter dated March 11, 1999 and the uncashed cheque in the amount of $106,716.69 from the Ministry to Mr. Tilden.
As I indicated to you back in December 1998, the Ministry would not take the position that by cashing the cheque, Mr. Tilden would forfeit his right to argue that the amount was not correct or did not represent the amount owing to him under the award of Mr. Dissanayake. Accordingly we will not be prepared to pay any additional interest or penalty of any sort as a result of Mr. Tilden not cashing his cheque. If he refuses to cash the cheque he does so at his own peril.
On June 17, 1999, the employer sent to the union counsel another cheque in the amount of $103,42.12, which was cashed by the grievor.
ISSUE
The employer accepts that it is liable to pay the grievor interest to January 12, 1999, the day the union received the assurance it sought that the grievor may cash the cheque without waiving his right to claim additional amounts of compensation. The employer, however, denies liability to pay any interest beyond that date. The union, on the other hand, claims interest up to June 17, 1999, the date the second cheque was received and cashed.
Submissions
Union counsel does not take issue with the fact that on January 12, 1999 the grievor received the assurance that by cashing the cheque, he will not be prejudiced with regard to any additional claims he may have. Indeed, Mr. Ryder conceded that by not cashing the cheque at that time, the grievor made a financial error. However, in his view, that error ought not deprive the grievor of his right to a full remedy, i.e. to be made whole for his losses. In his view, to deny interest would be tantamount to penalizing the grievor for his error. He cited case law to the effect that interest awarded by arbitrators on monies owing, is compensatory in nature and submitted that interest ought not be used to penalize the grievor or the employer.
Counsel stressed that until the cheque was actually cashed by the grievor on June 17, 1999, the employer had the full enjoyment of the amount in question. Counsel submits that if the employer’s position is upheld, it results in a windfall to the employer because for the period in question it gets to enjoy the money that really belonged to the grievor, at no cost. Counsel submits that as long as the employer had the benefit of that money, it must be held responsible to pay interest to the grievor.
The employer agreed that an interest award is compensatory in nature. Interest is awarded where a person has been deprived of money that he was properly entitled to. Counsel submits that from January 12, 1999, the grievor cannot claim that he was deprived of the amount of the cheque. He had the cheque, as well as an assurance that he can cash it without any risk of prejudicing any other claims he may have. Subsequently, he was specifically warned that if he continued to refuse to cash the cheque, the employer would not be responsible for interest. Therefore, if the grievor did not have the benefit of the money between January 12, 1999 and June 17, 1999, it was not due to any fault of the employer but a consequence of his own choosing. In her view, the employer should not be held responsible for interest, when it provided the grievor with a cheque, urged him repeatedly to cash it, and gave a clear assurance that by cashing the cheque the grievor was not waiving any right to any additional claims.
Conclusion
When the Board orders interest to be paid on back wages as it did here, the rationalization is that the grievor had wrongfully been denied the use of that money as a result of the employer’s conduct in contravention of the collective agreement. Interest is awarded as compensation for the loss of the use of that money which was the result of the employer’s wrongful conduct. The issue is whether that reasoning applies with regard to the period between January 12 and June 17, 1999.
Turning to the facts, within a few days of the Board order, the employer made an interim payment of $ 20,000.00. On December 21, 1998, the union sought an additional ‘down-payment’. Within days, the employer sent a further cheque in the amount of $ 106,716.69, but stated that it represented ‘full and final payment on the award’. Quite understandably, this was a cause for concern for the grievor. He did not cash the cheque, and quite rightly pointed out that the amount of the cheque did not represent ‘full and final payment’. Most importantly through his counsel’s letter of January 4, 1999, he specifically sought an assurance that the employer would ‘have no objection to his cashing the cheque without compromising his right to assert the balance of his award.’
It is undisputed that on January 12, 1999, the grievor received the very assurance he sought. Then however, for some unexplained reason, the grievor decided that the cheque would not be cashed. The employer at this point not only reiterated its earlier assurance that ‘the Ministry would not take the position that by cashing the cheque, Mr. Tilden would forfeit his right to argue that the amount was not correct or did not represent the amount owing to him under the award of Mr. Dissanayake,’ but specifically put the grievor and the union on notice that ‘we would not be prepared to pay any additional interest or penalty of any sort as a result of Mr. Tilden not cashing his cheque.’
While not claiming that there was any justifiable reason for the grievor to not cash the cheque at that time, union counsel submitted that despite that ‘error’ on the part of the grievor, the only fact that matters is that the employer had the money until it was actually cashed. In his view, as long as the employer had the benefit of the money that was really the grievor’s, the employer was liable for interest.
With respect, I disagree with the union’s position. Before the employer becomes liable to pay interest by way of compensation, it must not only be established that the employer had the benefit of money that properly belonged to the grievor, but also that the employer having that money - and the grievor being deprived of it - was the result of the employer’s wrongful conduct. The loss of the use of the money must be a consequence of the employer’s wrongful conduct. Thus Waddams, The Law of Damages (1983) at 469 (cited in Re Queen in Right of Ontario & OPSEU (1986) 1986 CanLII 2476 (ON HCJ), 57 OR (2d) 641 at p. 648) in discussing the basis for awarding interest as damages writes, One who fails to pay promptly money justly due to another does the other a wrong. This wrong, consists of delay in payment of what is owed .... To illustrate the fallacy of the union’s position, I take a simple example where an employee fails or refuses to cash his pay cheque for 6 months. Clearly in this circumstance, the money remains with the employer for that period. Surely, the employee cannot claim interest by way of compensation for that period on the basis that the employer had the use of the money. There, as here, the employee was not deprived of the use of the money by the employer. Rather, the employee for some reason of his own, had decided not to use the money which was made available by the employer. If the grievor was denied the use of the money for the period in question, it was a result of his own decision. When the employer issues a valid cheque, representing monies it owes, whether it is a pay cheque or a cheque representing back wages, the grievor is no longer in a position to claim that the employer is depriving him of money owed to him. He has the ability to use the money. If he chooses not to do so without justification, he does so at his own peril. In the present case the employer delayed the payment of money justly owed to the grievor. However, that delay lasted only until January 12, 1999. Beyond that date it cannot be said that there was any delay in payment on the part of the employer. It is not suggested that after he received the assurance from the employer, the grievor had any further concern that justified his not cashing the cheque. Indeed no reason was offered for that decision. Where the employer has not wrongfully deprived the grievor of monies owed, it is not responsible for any losses the grievor may have suffered as a result of his own decision, without any justification, not to use the money that was at his disposal.
Therefore, I find that the employer’s liability for interest ceased as of January 12, 1999.
I remain seized with any other outstanding issues with regard to remedy.
Dated this 7th Day of February of 2000 at Hamilton, Ontario