GSB# 0725/95
UNION# 95C913
IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
BETWEEN
Ontario Public Service Employees Union
(Donoghue)
Grievor
- and -
The Crown in Right of Ontario
(Ministry of Transportation)
Employer
BEFORE
Richard Brown
Vice-Chair
FOR THE UNION
Robin Gordon
Grievance Officer
Ontario Public Service Employees Union
FOR THE EMPLOYER
Kelly Burke
Senior Counsel
Management Board Secretariat
HEARING
October 4 & November 5, 2002.
DECISION
Stephen Donoghue claims he has been discriminated against on the ground of disability, because neither his Long Term Income Protection (LTIP) benefits nor the pension contributions made by his employer have been increased to reflect a raise in salary which came into effect after he was disabled.
II
Mr. Donoghue began working for the Ministry of Transportation in June of 1965. He held the position of Technician 1 Construction when disabled. Mr. Donoghue commenced receiving LTIP benefits in July of 1987 and did not return to work before retiring approximately nine years later. After he left active employment, his former position was reclassified and renamed Senior Technician Transportation Construction. The reclassification led to a salary increase of nine per cent effective after he departed the job. The facts are set out in greater detail in the following agreed statement:
The grievor, Stephen Donoghue, began his employment with the Ministry of Transportation on June 28, 1965.
Mr. Donoghue was approved to receive LTIP benefits effective July 16, 1987. As of that date, Mr. Donoghue was in receipt of LTIP benefits.
Immediately prior to his absence on LTIP the grievor was employed in the Technician 1 Construction (T1C) classification.
Mr. Donoghue's LTIP benefits were calculated according to the employee's gross salary at the date of disability in accordance with article 42.2.1 the collective agreement. His gross salary at the time was $28,872.
On various dates between January 28, 1988 and June 1988, many employees working in the T1C classification filed grievances claiming the position was inappropriately classified. Mr. Donoghue was not among the grievors. The grievances were consolidated by the parties.
The GSB issued a decision in relation to these grievances. It is known as McCauley and Truchon et al. dated January 22, 1990. The Board ordered the employer to reclassify the grievors and to develop a new class standard for the T1C classification.
Pursuant to the McCauley Truchon decision, the T1C became Senior Technician, Transportation Construction (STTC) and the 20 day rule was applied with respect to retroactivity and interest.
The issue of salary to be paid to the new classification was determined by an interest arbitration award. The arbitration panel, chaired by Howard D. Brown, awarded all steps of the STTC classification a 9% increase retroactive to January 9, 1991.
The parties entered a Memorandum of Settlement dated August 24, 1994 wherein the employer agreed to compensate each grievor with full retroactivity (retroactive calculations provided in the award) to twenty days prior to each individual grievance date, save and except where Management had committed in writing that an employee would be treated as an exception to the "twenty day rule".
By letter dated February 14, 1990, the employer confirmed that the McCauley and Truchon decision applied to all non-grievors in the affected classification retroactive to twenty days prior to the date on which the award was received (January 22, 1990). Accordingly, the effective date of the reclassification to the STTC for non-grievors became December 20, 1989.
Mr. Donoghue did not return to work until his retirement on June 30, 1996.
II
The union contends the employer’s treatment of the grievor contravenes the Ontario Human Rights Code and the discrimination clause in the collective agreement. As the prohibition against discrimination in the Code is at least as broad as the one in the agreement, I need consider only the statute. The parties agree Mr. Donoghue has a “handicap” within the meaning of the Code. I was referred to the following sections dealing with discrimination on the ground of handicap:
5.(1) Every person has a right to equal treatment with respect to employment without discrimination because of .... handicap.
11.(1) A right of a person under Part I is infringed where a requirement, qualification or factor exists that is not discrimination on a prohibited ground but that results in the exclusion, restriction or preference of a group of persons who are identified by a prohibited ground of discrimination and of whom the person is a member, except where,
(a) the requirement, qualification or factor is reasonable and bona fide in the circumstances, or
(b) it is declared in this Act, other than in section 17, that to discriminate because of such ground is not an infringement of the right.
(2) The Commission, a board of inquiry or a court shall not find that a requirement, qualification or factor is reasonable and bona fide in the circumstances unless it is satisfied the needs of the group of which the person is a member cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any.
III
I begin my analysis by noting the grievor’s complaint is about two forms of remuneration: LTIP benefits and pension. His complaint is not about being denied access to employment in general or to a particular job. In other words, the issue concerns compensation not participation in the world of work.
The application of the Code to matters of compensation was considered by the Court of Appeal in Ontario Nurses’ Association v. Orillia Soldiers Memorial Hospital (1999), 1999 CanLII 3687 (ON CA), 169 D.L.R. (4th) 489. The employer in that case paid the full premium for health and welfare benefits provided to active employees. For the first thirty months that disabled nurses were absent from work and in receipt of long-term disability benefits, the hospital continued to pay the full cost of providing such benefits; thereafter, the employer made no contribution to health and welfare premiums. The Ontario Nurses’ Association (ONA) argued this differential treatment contravened the Code.
Holding there was no direct discrimination, Mr. Justice Rosenberg wrote on behalf of the Court:
Disabled nurses do not receive compensation because they are not providing services to their employer. It is not prohibited discrimination to distinguish for purposes of compensation between employees who are providing services and those who are not. ...
In the case presently before the court, the purpose of the employer contributions to benefit plans is to provide an additional form of compensation in exchange for work. Having chosen to provide this form of compensation, the employer could not discriminate on a prohibited basis. However, the employer could distinguish based on the reason for providing the compensation: work. On its face, discrimination would exist if the employer provided different levels of compensation for work because of handicap. Likewise, it would constitute discrimination if the employer provided different levels of compensation for not working because of handicap. But, in this context: it makes no sense to compare working employees with those not working. ...
I also do not find it helpful to attempt to isolate different elements of the compensation package such as employer contributions to premiums, vacation pay, and wages and ascribe different purposes to each so as to create a discrimination argument. They are all part of the compensation package negotiated by the parties in exchange for work by the employees. When the employee is not working, different considerations and different forms of payment may apply. For instance, employees may receive workers' compensation or long-term disability payments. ...
Leaving aside the difference between employees on workers' compensation and those on long-term disability, which is not properly before this court, the benefits provided to handicapped employees not providing work are more generous than to other employees not providing work. Therefore, there is no discrimination on a prohibited basis within the meaning of s. 5(1) of the Code. (pages 502 to 504)
Turning to indirect or constructive discrimination, governed by section 11(1) of the Code, Mr. Justice Rosenberg wrote:
In my view, it is possible to find that a neutral rule in this case has a discriminatory effect within the meaning of s. 11(1). To repeat, the neutral rule may be stated as follows: the employer
contributes toward premium coverage of participating eligible nurses in the active employ of the hospital. This rule has the effect of requiring the group of employees identified by the prohibited ground of discrimination to assume the burden of paying the entire contributions for these benefits if they wish to maintain coverage. Admittedly, these employees are treated no differently than other employees on unpaid leave of absence, the difference is that these employees are adversely effected by the rule because of their disability. The issue then is whether the employers are entitled to the BFOQ [i.e. bona fide occupational requirement] justification in s. 11(1)(b) [actually s. 11(1)(a)]. In my view, they are. I reach this conclusion not because of the distinction drawn in Versa Services between compensation and participation, but rather by having regard to the nature of the accommodation required for this kind of constructive discrimination.
An example may assist in understanding the problem. Assume that an employer changes from paying its employees wages based on hours worked to paying on the basis of the number of pieces produced. Assume further that the disabled employees are simply unable to produce as many pieces as able-bodied employees and as a result their wages are reduced. Arguably, this constitutes constructive discrimination. The facially neutral standard of paying by the number of pieces produced results in a restriction on the ability of the disabled employees to earn the same wages as able-bodied employees. In accordance with s. 11(1)(a), the employer could justify the different result by showing that this standard was reasonable and bona fide in the circumstances. However, in accordance with s. 11(2), the board of inquiry or a court is only entitled to find that the standard is reasonable and bona fide if it is satisfied the needs of the group cannot be accommodated without undue hardship considering the “cost, outside sources of funding, if any, and health and safety requirements, if any.” Nevertheless, I do not read s. 11(2) as imposing upon the employer the burden of simply topping up the wages of the disabled employees. That, in my view, is not the type of accommodation contemplated by s. 11(2) and is in fact inimical to the principles underlying the Code...
Simply topping up the wages of the disabled employees and paying them as if they are not disabled is nothing more than reverse stereotyping ... Rather, it would seem to me that the employer in this hypothetical must attempt to accommodate the group. For example, the employer may provide devices and instruments that would allow the disabled employees to perform at the same level as the able bodied employees. The duty is on the employer to take all steps short of undue hardship to accommodate the need of the person discriminated against so that they can compete equally with the other employees. It is by attempting to accommodate their actual characteristics so as to bring them within the workplace environment that the employer complies with the Code. ...
It may be that this goal cannot be fully accomplished and that short of undue hardship the employer, for example, can provide technical aids that will only partly bring the disabled employees to the same level as the able-bodied employees. However, in my view, that is all the Code requires the employer to do. The employer is not required to abandon the standard (assuming it to be a BFOQ) and pay the disabled employees according to some different standard. Obviously, it may do so voluntarily, but this is not what the Code requires.
The appellant in this case does not seek any reasonable accommodation or modification of the rule for the actual characteristics of its disabled members. ...
Assuming the rule respecting employer contributions to benefit plans constitutes constructive discrimination, I am satisfied that the justification in s. 11(1)(b) [actually s. 11(1)(a)] applies. Requiring work in exchange for compensation is a reasonable and bona fide requirement. (page 512 and 515; emphasis added)
In this passage, the Court of Appeal disagreed, to some extent, with the decision in Versa Services Ltd. and Milk and Bread Drivers, Dairy Employees, Caterers and Allied Employees Union (1994), 1994 CanLII 18643 (ON LA), 39 L.A.C. (4th) 398. As my decision in Versa Services was upheld by the Divisional Court and then followed by most arbitrators subsequently grappling with indirect discrimination in compensation, it is important to understand precisely how the law as stated in Versa Services has been changed by the Court of Appeal. I described the extent of that change in Canadian Bank Note Company and Graphic Communications Union, decision dated September 8, 1999:
The Court’s reasoning in Orillia Soldiers was animated by the same fundamental premise articulated in my decision in Versa Services--i.e. that compensation is paid for work. This quid pro quo explains why the Code does not require an employer to pay employees unable to work because of handicap, so long as the employer does not pay employees absent for other reasons for periods of the same duration. In Versa Services, I wrote:
Are employees on LTD benefits being denied equal treatment within the meaning of the Code? They are being treated in a less advantageous manner than employees on the job for whom the company contributes towards the cost of benefits. However, active employees are performing services in exchange for this benefit contribution, whereas those on LTD are not working. LTD benefits do not commence until an employee has been off the job for more than a year and continue until an employee is able to work again or reaches retirement age. There is no evidence to suggest the employer makes any benefit contributions for an employee without a handicap who is absent for a period of similar duration. In the absence of such evidence, I cannot find handicapped employees collecting LTD benefits are being treated worse than those without a handicap who have a similar attendance record. I must assume entitlement to benefit contributions turns on attendance at work, not on handicap. In other words, everyone is treated the same way, based upon attendance, regardless of handicap. If this type of equal treatment is all the Code requires, there would be no violation. ...
The case at hand is not about modifying jobs so they can be performed by disabled people. It is not about entering or leaving the world of work. The handicaps afflicting employees on LTD benefits are sufficiently serious that they are unable to work for more than a year. The union contends the employer is obliged to make benefit contributions on their behalf while they are off the job. As these contributions are a form of compensation, this case concerns compensation while not working, rather than participation in the world of work. According to the union, the Code compels the employer to bear the cost of providing benefits to these employees, even though benefits are not provided to able-bodied employees who are absent from work for such a prolonged period. Does equal treatment require not only accommodative measures to allow people to work, but also special payments for those unable to do so? I think not. ...
I have concluded the Code does not require employers to adopt special compensation measures for people with disabilities. (pages 201 to 204)
By saying my award in Versa Services and Court of Appeal’s judgement in Orillia Soldiers rest upon the same principle of quid pro quo, I do not mean to suggest there is no difference between them. There is a distinction on a less fundamental level. I held the notion of indirect discrimination embodied in section 11(1) of the Code applied only to participation and not to compensation. The Court of Appeal disagreed on this point, ruling that section 11(1) does apply to compensation. However, the Court went on to say section 11(1)(a) excuses an employer from adopting special compensatory measures to overcome indirect discrimination.
The difference between these two lines of reasoning is a subtle one with limited practical significance. It would not affect the outcome in a broad range of cases, including not only Orillia Soldiers and Versa Services, but also all or most of the cases which I reviewed in “Human Rights in Employment: Of Participation and Compensation” (1997), 4 Canadian Labour and Employment Law Journal 283. On my approach, the facts in Orillia Soldiers and Versa Services disclose no violation because indirect discrimination in compensation is not unlawful. On the Court’s approach, these are prima facie cases of unlawful indirect discrimination, but there is no violation because an employer is not required to top-up compensation.
The two approaches would produce different outcomes in the Court’s hypothetical situation involving piece work. On these facts, the Court’s reasoning leads to a finding of indirect discrimination and, therefore, requires the employer to modify the workplace to the point of undue hardship, whereas my analysis suggests no discrimination has occurred. Having now turned my mind to this hypothetical situation, I prefer the Court’s reasoning, and I would adopt it even if I were not obliged to do so. (pages 12 to 14)
Union counsel in the instant case relies upon three cases: (1) Riverdale Hospital and Canadian Union of Public Employees (1993), 1993 CanLII 16729 (ON LA), 39 L.A.C. (4th) 63 (Stewart); (2) Ontario Public Service Employees Union and Ministry of Health, decision dated March 7, 1994, GSB File No. 2550/92 (Dissanayake); and (3) Victorian Order of Nurses and Ontario Nurses’ Association (1996), 1996 CanLII 20457 (ON LA), 56 L.A.C. (4th) 235 (Low). In each case, vacation pay or severance pay was based upon length of service, and service was measured by excluding periods when an employee was absent due to disability. Each arbitrator held this method of calculating service amounted to discrimination contrary to the applicable collective agreement or the Ontario Human Rights Code, because employees absent from work due to disability were treated less favourably than those actively employed. This reasoning was based upon the premise that a disabled employee absent from work should be compared to those working and led to the conclusion that a employee with a disability is entitled to compensation, in the form of vacation or severance pay, for time not worked. This is the very sort of reasoning subsequently rejected by the Court of Appeal in Orillia Soldiers Memorial Hospital.
IV
The calculation of LTIP benefits is governed by article 42.1.1(a) of the collective agreement:
The Long Term Income Protection benefit is sixty-six and two thirds percent (66 2/3%) of the employee’s gross salary at the date of disability, including any retroactive salary adjustment to which the employee is entitled. (emphasis added)
As the benefits received by Mr. Donoghue were two-thirds of his salary at the date of disability, the parties agree he was treated in conformity with the requirements of this article. He was not “entitled” to have the nine per cent increase reflected in his benefit payments, within the meaning of this article, because that increase was not retroactive to his date of disability.
Pension contributions are governed by the OPSEU Pension Plan. The relevant portions of article 7.3 of this plan states:
(2) If a member qualifies for a benefit under a long term income protection plan as a result of a disability incurred on or after the lst day of July, 1974, the employer that employed the member on the date when the member qualified for the benefit shall, subject to subsection (7), contribute to the Fund on behalf of the member the amounts set out in subsections (3), (4) and(5) while the member continues to qualify for the benefit.
(3) Subject to subsection (4), the contributions mentioned in subsection (2) shall be calculated in accordance with Article 4 and paid on the annual salary rate of the member immediately before the disability was incurred in respect of which he or she qualifies for a benefit. (emphasis added)
In compliance with these provisions, the pension contribution paid by the employer on behalf of the grievor was based upon his salary immediately before he became disabled.
The result of applying the provision in the collective agreement concerning LTIP benefits, and the one in the pension plan concerning the employer’s contribution, was that Mr. Donoghue derived no advantage from the nine per cent increase received by employees who continued to work after he left the workplace.
Does this outcome violate the Ontario Human Rights Code? The reasoning in Orillia Soldiers Memorial Hospital leads to the conclusion there has been no violation. Mr. Donoghue was treated less favourably during his absence from work than employees remaining on the job. Their salary included the nine per cent increase and it was also reflected in the employer’s share of pension contributions for them, whereas the increase was reflected in neither the grievor’s LTIP benefits nor the pension contributions made by the employer on his behalf. This differential treatment was based upon work, not disability, and does not contravene the Code. There would be a contravention only if the grievor received less favourable treatment than employees absent from work for some reason other than disability. The facts presented to me disclose no such disparity. Indeed, Mr. Donoghue fared better, in two respects, than able-bodied employees off the job: he received LTIP benefits; and the employer paid not only its share of pension contributions but also the share that normally would have been contributed by an employee. The grievance is dismissed.
Issued at Toronto this 3rd day of December, 2002.