GSB#1250/00; 1570/00; 1606/00; 1608/00; 1609/00; 1613/00; 1649/00; 1650/00; 1651/00; 1652/00; 1653/00; 1654/00; 1655/00; 1656/00; 1657/00; 1658/00; 1659/00; 1660/00; 1661/00; 1662/00; 1663/00; 1664/00; 1665/00; 1666/00; 1688/00; 1689/00; 1699/00; 1702/00; 1734/00; 1735/00; 1736/00; 1737/00; 1738/00; 1740/00; 1741/00; 1744/00; 1745/00; 1746/00; 1747/00; 1782/00; 1794/00; 1804/00; 1813/00; 1814/00; 1822/00; 1912/01
UNION# SEE APPENDIX “A”
IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
BETWEEN
Ontario Public Service Employees Union (Union Grievance et al.)
Grievor
- and -
The Crown in Right of Ontario (Ministry of Health and Long-Term Care)
Employer
BEFORE
Richard Brown
Vice-Chair
FOR THE UNION
Ed Holmes Ryder Wright Blair & Doyle Barristers and Solicitors
FOR THE EMPLOYER
John Smith Senior Counsel Management Board Secretariat
HEARING
December 18, 2002 & April 14, 2003.
DECISION
The grievances listed in Appendix “A” arise out of the transfer of psychiatric institutions from the Ministry of Health to hospitals in the broader public sector. The union contends former crown employees, who worked for the Ministry in these facilities, were entitled to termination pay and severance pay under the Employment Standards Act. The employer disagrees. Rather than leading evidence bearing upon this issue, counsel sketched the factual backdrop in their opening statements.
I
The union claims all employees were entitled to statutory severance pay in the amount of one weeks’ pay for each year of service to a maximum of 26 weeks. Some employees got severance pay and some did not. Classified public servants with one year of service or more were paid in accordance with article 53 (full-time) or article 78 (part-time) of the collective agreement. As the amount paid under the collective agreement equals the amount to which the union contends these employees were entitled under the Act, no claim for additional severance pay is advanced on their behalf. Unclassified employees with five years of employment or more also received severance pay in the amount to which a statutory entitlement is asserted. The union now seeks severance pay for all other employees.
The union contends all employees also were entitled to 16 weeks’ notice of termination or pay in lieu of such notice. Unclassified employees with three months of service or more, who did not take a job with a receiving hospital, got sixteen weeks of notice and/or pay. The union now seeks termination pay for all other employees.
II
Entitlement to severance pay is governed in part by section 64 of the Employment Standards Act. Section 64(1) states:
An employer who severs an employment relationship with an employee shall pay severance pay to the employee if the employee was employed by the employer for five years or more … (emphasis added).
As noted by counsel for the employer, anyone employed for less than five years is not entitled to severance pay. The union’s attempt to secure such pay for employees with less than five years of employment must fail for this reason alone.
III
Entitlement to termination notice or pay in lieu is governed in part by section 54 of the Employment Standards Act stating:
No employer shall terminate the employment of an employee who has been continuously employed for three months or more unless the employer,
(a) has given to the employee written notice of termination in accordance with section 57 or 58 and the notice has expired; or
(b) has complied with section 61. (emphasis added)
Sections 57 and 58 deal with termination notice and section 61 deals with pay in lieu. As noted by the employer, section 54 clearly indicates anyone employed for less than three months has no entitlement to notice or pay. The union’s attempt to secure termination pay for employees with less than three months of employment fails for this reason alone.
IV
Counsel for the employer contends classified employees have no entitlement to termination or severance pay because they resigned their employment with the crown. This argument is based upon articles 6.4 and 6.5 of Appendix 18 to the collective agreement:
6.4 Employees who accept a job offer in accordance with Article 6.1.1 with a receiving employer will be deemed to have resigned effective the date they commence employment with the new employer, and no other provisions of the Collective Agreement will apply except for Article 53 or 78 (Termination Pay).
6.5 If an employee refuses a job offer which provides a salary of at least 85% of the respective employee's weekly salary at the time of the transfer and recognizes the service and seniority in the Ontario Public Service (OPS) of each employee for the purpose of qualification for vacation, benefits (except pension), layoff, job competition, severance and termination payments to the extent that they are provided in the proponent's workplace, the employee shall be deemed to have resigned effective the date of the transfer of their job and no other provision of the collective agreement will apply except for Article 53 or 78 (Termination Pay).
As all classified employees received job offers from one of the receiving hospitals, I was urged to conclude they resigned from their employment with the crown.
An employee is entitled to notice of termination or pay in lieu when he or she has been terminated within the meaning of section 56(1) of the Employment Standards Act. The relevant portions of this section state:
An employer terminates the employment of an employee for the purposes of section 54 if,
(a) the employer dismisses the employee or otherwise refuses or is unable to continue employing him or her;
(b) the employer constructively dismisses the employee and the employee resigns from his or her employment in response to that within a reasonable period of time …
Bearing in mind the provisions in Appendix 18 deeming classified employees to have resigned, counsel for the union contends they resigned their employment with the crown after being constructively dismissed. According to this line of argument, they were terminated within the meaning of paragraph (b) of section 56(1).
I agree these employees were terminated under section 56(1), but I arrive at this conclusion by a different route. In my view, they fall under paragraph (a) because the employer refused to continue to employ them. They were forced to leave their employment with the crown when the facilities where they had worked were transferred to the receiving hospitals; they did not leave crown employment on their own initiative.
In concluding classified employees were terminated under section 56(1) of the Act, I have not overlooked the references to deemed resignation in Appendix 18 of the collective agreement. The relationship between the agreement and statutory employment standards is governed by section 5 of the Act:
(1) Subject to subsection (2), no employer or agent of an employer and no employee or agent of an employee shall contract out of or waive an employment standard and any such contracting out or waiver is void.
(2) If one or more provisions in an employment contract or in another Act that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract or Act apply and the employment standard does not apply.
The employer does not rely upon subsection (2) by suggesting the collective agreement provides a greater benefit than notice or pay in lieu. In the absence of a greater benefit, subsection (1) prohibits contracting out of an employment standard. Accordingly, the deemed resignation provisions in Appendix 18 of the agreement cannot prevail over the employment standard governing termination.
The same line of reasoning applies to severance pay. Section 63(1) states:
An employer severs the employment of an employee if,
(a) the employer dismisses the employee or refuses to continue employing the employee …
Former employees of the crown at the psychiatric institutions were severed within the meaning of this section, because the employer refused to continue to employ them. The employer does not suggest Appendix 18 to the collective agreement confers a greater benefit than severance pay under the Act. In the absence of a greater benefit, the deemed resignation provisions in Appendix 18 cannot prevail over the employment standard governing severance.
V
Employer counsel submits any claim to either termination pay or severance pay, made on behalf of an employee who accepted an offer of employment with a receiving hospital, is defeated by section 9 of the Employment Standards Act concerning the sale of a business. The relevant portions of this section state:
(1) If an employer sells a business or part of a business and the purchaser employs an employee of the seller, the employment of the employee shall be deemed not to have been terminated or severed for the purposes of this Act and his or her employment with the seller shall be deemed to have been employment with the purchaser for the purpose of any subsequent calculation of the employee’s length or period of employment.
(3) In this section “sells” includes leases, transfers or disposes in any other manner, and “sale” has a corresponding meaning
Union counsel acknowledges the transfer of psychiatric facilities constituted the sale of a business within the meaning of section 9. He concedes the Act would not have been violated if this section had been invoked to deny severance pay and termination notice or pay in lieu to all employees transferring to the receiving hospitals. However, counsel argues the employer cannot use section 9 in an arbitrary and discriminatory manner, so as to “pick and choose” among members of the bargaining unit. As a legal foundation for this argument, counsel for the union cites 3 cases dealing the exercise of management rights: (1) United Parcel Service and Teamsters Union (1981), 1981 CanLII 4389 (ON LA), 29 L.A.C. (2d) 202 (Burkett); (2) OPSEU (Pilon) and Ministry of Community Services, GSB File No. 1254/99, decision dated November 5, 2001 (Brown); and (3) OPSEU and Ministry of Transportation, GSB File No. 0211/02, decision dated April 9, 2002 (Brown). Employer counsel contends these cases have no bearing upon entitlement to statutory benefits.
I begin my analysis by considering whether there is a factual basis for the union’s allegation. Section 9 applies only to employees who transferred to one of the receiving hospitals. To prove the employer has used section 9 in an arbitrary or discriminatory manner, the union must demonstrate management has invoked this section to deny statutory benefits to some transferred employees, while affording the same benefits to other such employees.
With respect to notice of termination or pay in lieu, I have already determined employees with less than three months of employment have no entitlement under the Act. This ruling rests upon the clear language of section 54 and is not based in any way upon the application of section 9. Accordingly, the set of employees whose entitlement to termination notice or pay could be affected by an arbitrary or discriminatory application of section 9 is limited to those who not only took a job with one of the receiving hospitals but also had worked at least three months for the crown. Were some of these employees treated more favourably than others through a selective reliance on section 9? As the stipulations made by counsel indicate none of the employees in this set received notice of termination or pay in lieu, there is no factual basis for the allegation of an arbitrary or discriminatory application of section 9.
With respect to severance pay, I have already determined employees with less than five years of employment have no entitlement under the Act. This ruling rests upon the clear language of section 64(1) and is not based in any way upon the application of section 9. Accordingly, the set of employees whose entitlement to statutory severance pay could be affected by an arbitrary or discriminatory application of section 9 is limited to those who not only took a job with one of the receiving hospitals but also had worked at least five years for the crown.
Most of the employees in this set received severance pay in the amount to which the union asserts an entitlement. Classified employees with at least one year of service were paid under sections 53 or 78 of the collective agreement. As the Act has no bearing upon such contractual payments, the employer could not have avoided paying these classified employees by relying upon section 9. The statutory severance payments made to the subset of unclassified employees with five years of employment or more could have been avoided if the employer had relied upon section 9. It was not invoked to deny them severance pay. To establish a factual basis for the allegation of an arbitrary or discriminatory use of section 9, the union must point to another subset of employees, who also took jobs with the receiving hospitals and had five or more years of employment, whose entitlement to statutory severance pay would be defeated by the employer’s current reliance on section 9. As the stipulations of counsel do not indicate whether such a subset exists, I remit this question to the parties. Only if this factual question is answered in the affirmative will there be any need to address the legal issue of whether the cases cited by the union apply to statutory benefits.
Dated at Toronto this 29th day of April 2003.
APPENDIX “A”
Correspondence of GSB File Numbers and OPSEU File Numbers
GSB
Union #
1250/00
00U146
1250/00
00U147
1570/00
01U018
1606/00
01U011
1608/00
01U012
1609/00
01U013
1613/00
01F028
1649/00
01F035
1650/00
01F036
1651/00
01F037
1652/00
01F038
1653/00
01F039
1654/00
01F040
1655/00
01F041
1656/00
01F042
1657/00
01F043
1658/00
01F044
1659/00
01F045
1660/00
01F046
1661/00
01F047
1662/00
01F048
1663/00
01F049
1664/00
01F050
1665/00
01F051
1666/00
01F052
1688/00
01F053
1688/00
01F054
1688/00
01F055
1688/00
01F056
1688/00
01F057
1688/00
01F058
1688/00
01F059
1688/00
01F060
1688/00
01F061
1688/00
01F062
1688/00
01F063
1688/00
01F064
1688/00
01F065
1688/00
01F066
1688/00
01F067
1688/00
01F068
1688/00
01F069
1688/00
01F070
1688/00
01F071
1688/00
01F072
1688/00
01F073
1688/00
01F074
1688/00
01F075
1688/00
01F076
1688/00
01F077
1688/00
01F078
1688/00
01F079
1688/00
01F080
1688/00
01F081
1688/00
01F082
1688/00
01F083
1688/00
01F084
1688/00
01F085
1688/00
01F086
1688/00
01F087
1688/00
01F088
1688/00
01F089
1688/00
01F090
1688/00
01F091
1688/00
01F092
1688/00
01F093
1688/00
01F094
1688/00
01F095
1688/00
01F096
1688/00
01F097
1688/00
01F098
1689/00
01U010
1699/00
01F372
1702/00
01F286
1702/00
01F287
1702/00
01F288
1702/00
01F289
1702/00
01F290
1702/00
01F291
1702/00
01F292
1702/00
01F293
1734/00
01F100
1734/00
01F101
1734/00
01F102
1734/00
01F103
1734/00
01F104
1734/00
01F105
1734/00
01F106
1734/00
01F107
1734/00
01F108
1734/00
01F109
1734/00
01F110
1734/00
01F111
1734/00
01F112
1734/00
01F113
1734/00
01F114
1734/00
01F115
1734/00
01F116
1734/00
01F117
1734/00
01F118
1734/00
01F119
1734/00
01F120
1734/00
01F121
1734/00
01F122
1734/00
01F123
1734/00
01F124
1734/00
01F125
1734/00
01F126
1734/00
01F127
1734/00
01F128
1734/00
01F129
1734/00
01F130
1734/00
01F131
1734/00
01F132
1734/00
01F133
1734/00
01F134
1734/00
01F135
1734/00
01F136
1734/00
01F137
1734/00
01F138
1734/00
01F139
1734/00
01F140
1734/00
01F141
1734/00
01F142
1734/00
01F143
1734/00
01F144
1734/00
01F145
1734/00
01F146
1734/00
01F147
1734/00
01F148
1734/00
01F149
1734/00
01F150
1734/00
01F151
1734/00
01F152
1734/00
01F153
1734/00
01F154
1734/00
01F155
1734/00
01F156
1734/00
01F157
1734/00
01F158
1734/00
01F159
1735/00
01F212
1735/00
01F213
1735/00
01F214
1735/00
01F215
1735/00
01F216
1735/00
01F217
1735/00
01F218
1736/00
01F219
1736/00
01F220
1736/00
01F221
1736/00
01F222
1737/00
01F223
1737/00
01F224
1737/00
01F225
1738/00
01F226
1738/00
01F227
1738/00
01F228
1740/00
01F274
1740/00
01F275
1740/00
01F276
1740/00
01F277
1740/00
01F278
1740/00
01F279
1740/00
01F280
1741/00
01F281
1741/00
01F282
1741/00
01F283
1741/00
01F284
1741/00
01F285
1744/00
01F243
1744/00
01F244
1744/00
01F245
1744/00
01F246
1744/00
01F247
1745/00
01F248
1745/00
01F249
1745/00
01F250
1745/00
01F251
1745/00
01F252
1745/00
01F253
1745/00
01F254
1745/00
01F255
1745/00
01F256
1745/00
01F257
1745/00
01F258
1745/00
01F259
1746/00
01F260
1746/00
01F261
1746/00
01F262
1746/00
01F263
1746/00
01F264
1746/00
01F265
1746/00
01F266
1746/00
01F267
1746/00
01F268
1746/00
01F269
1746/00
01F270
1746/00
01F271
1746/00
01F272
1746/00
01F273
1747/00
01F237
1747/00
01F238
1747/00
01F239
1747/00
01F240
1747/00
01F241
1747/00
01F242
1782/00
01F302
1794/00
01F229
1794/00
01F230
1794/00
01F231
1794/00
01F232
1794/00
01F233
1794/00
01F234
1794/00
01F235
1794/00
01F236
1804/00
01F160
1804/00
01F161
1804/00
01F162
1804/00
01F163
1804/00
01F164
1804/00
01F165
1804/00
01F166
1804/00
01F167
1804/00
01F168
1804/00
01F169
1804/00
01F170
1804/00
01F171
1804/00
01F172
1804/00
01F173
1804/00
01F174
1804/00
01F175
1813/00
01F188
1813/00
01F189
1813/00
01F190
1813/00
01F191
1813/00
01F192
1813/00
01F193
1813/00
01F194
1813/00
01F195
1813/00
01F196
1813/00
01F197
1813/00
01F198
1813/00
01F199
1813/00
01F200
1813/00
01F201
1813/00
01F202
1813/00
01F203
1813/00
01F204
1813/00
01F205
1814/00
01F206
1814/00
01F207
1814/00
01F208
1814/00
01F209
1814/00
01F210
1814/00
01F211
1822/00
01F178
1912/01
00U157