GSB# 1594/00, 0503/01, 1387/02

UNION# 01B057, 01B058, 01B059, 01B060, 01U058, 02U121

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Ontario Public Service Employees Union (Bye et al.)

Grievor

• and -

The Crown in Right of Ontario (Ministry of Health and Long-Term Care and Management Board Secretariat)

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

June 18, 2003.

DECISION

Six grievances were consolidated for hearing: two union grievances, File No. 0503/01 and File No. 1387/02 respectively; and four individual grievances, File No. 1594/00. All of these grievances arise out of the transfer of work from the provincial government to another employer under Schedule A or Schedule C of Appendix 18 to the collective agreement. The common issue is whether severance pay is owed to employees, with between one and five years of service, as a result of their work being transferred. The union claims all such employees are entitled to severance pay under article 53 or article 78 of the agreement. The employer contends the only employees entitled to severance pay under either of these article are those who elected not to be included in a request for proposals (RFP).

I

Entitlement to severance pay is governed by article 53.4 relating to full-time employees and article 78.1 relating to part-time employees. As the relevant language in these two provisions is identical, only the applicable portion of the former article need be reproduced:

53.4 An employee,

(a) who has completed a minimum of one (1) year of continuous service and who ceases to be an employee because of,

(3) release from employment under section 22(4) of the P.S.A., or

(4) resignation during the surplus notice period; or

(b) who has completed five (5) years of continuous service and who ceases to be an employee for any reason other than,

(1) dismissal for cause under section 22 of the P.S.A., or

(2) abandonment of position under section 20 of the P.S.A.;

is entitled to severance pay ...

II

The application of articles 53 and 78 to employees, with between one and five years of service, whose work had been transferred to a new employer under Schedule B of Appendix 18, was addressed in Ministry of Health and OPSEU, File No 1723/99, decision dated November 9, 2000 (Brown). The facts in that case are summarized in the first paragraph of the award:

The union has filed two policy grievances, one relating to the transfer of Brockville Psychiatric Hospital and the other relating to the transfer of Hamilton Psychiatric Hospital. Each of these institutions is about to be transferred to a local hospital in the broader public sector. Pursuant to a transfer agreement negotiated with the crown, each receiving facility has made a offer of employment to all affected employees on terms and conditions which include a salary of at least 85% of their former earnings and recognition of service and seniority acquired in the Ontario public service.

Transfers under Schedule B of Appendix 18 are governed by section 6 of that appendix. In Ministry of Health, I made the following comments about section 6:

Section 6 of Appendix 18 divides employees into three categories; (1) those who accept a job offer from the receiving employer; (2) those who decline a “good” job offer; and (3) those who reject a “poor” job offer. Under section 6.6, employees who decline “poor” job offers maintain their entitlements under the collective agreement including article 20 … Section 6.6 preserves article 20 rights for employees who reject a “poor” job offer, but such rights are not preserved by section 6.5 concerning employees who decline a “good” job offer. Nor are they preserved by section 6.4 concerning employees who transfer from the crown to the receiving employer. Employees to whom these latter two sections apply are deemed to have resigned and their contractual rights are expressly limited to those found in article 53. Their entitlements under article 20 are abrogated. In short, they forfeit their article 20 rights but maintain their rights under article 53 …

Section 6.1.1 requires the ministry to propose that the receiving employer make job offers with no loss of salary and with recognition of service and seniority. When the new employer does not fully agree with this proposal, section 6.1.2 contemplates the ministry offering a financial incentive up to the amount of enhanced severance pay for the employees who “will be declared surplus”. If the receiving employer initially suggests offers that include recognition of service and seniority and a salary of at least 85% but less than 100% of previous compensation, they would be “good” offers. Nonetheless, section 6.1.2 would apply and the employees would be treated as “surplus” for the purpose of calculating the financial incentive. In this sense, section 6.1.2 characterizes as surplus an employee with a “good” offer. (pages 7, 8 and 10)

With these comments in mind, I turned to consider entitlement to severance pay:

Do sections 6.4 and 6.5 of Appendix 18 defeat a claim to severance pay under article 53.4(a)(4)? The answer to this question is not obvious. Entitlement to severance pay under this article depends upon whether an employee resigns during the “surplus notice period.” The contractual right to a surplus notice period is created by article 20.2. Sections 6.4 and 6.5 remove article 20 rights from employees with ‘good” job offers. As these sections disentitle employees to notice of layoff under article 20.2, one might conclude they are not surplus and have no surplus notice period. If so, their deemed resignation could not occur during such period. This reasoning would indicate employees with between one and five years of service are not entitled to severance pay under article 53.4(a)(4). This is the essence of the employer’s argument.

On the other hand, the entitlement of employees to severance pay under article 53 is explicitly preserved by sections 6.4 and 6.5, without any distinction being drawn between employees with more than five years of service and those with less. This express preservation might lead one to conclude that the entitlement of employees to severance pay under article 53.4 is not affected by these two sections of Appendix 18, not only for employees with more than five years of service but also for those with less. Moreover, employees who receive “good” offers are nonetheless surplus in the sense that they are superfluous to the needs of the public service after the date of transfer, as acknowledged by the use of the word “surplus” in section 6.2.1. Because they receive notice of their redundant status in the public service before the transfer occurs, their deemed resignation on the date of transfer might be said to occur during their “surplus notice period” within the meaning of article 53.4(a)(4). This is the essence of the union’s argument.

The foregoing analysis of the language of sections 6.4 and 6.5 of Appendix 18 leads me to conclude it is patently ambiguous as to whether employees with between one and five years of service are entitled to severance pay. In other words, when the parties agreed in Appendix 18 to negate article 20 rights and to reaffirm article 53 rights, they failed to clearly indicate their intention regarding entitlement under article 53.4(a)(4) which might be seen to depend upon the existence of article 20 surplus rights. Perhaps the negotiators did not turn their minds to this precise issue.

What bearing does this ambiguity have upon the proper interpretation of the collective agreement as a whole? As noted above, article 53.4 was part of the collective agreement before Appendix 9 and Appendix 18 were added to it. Before these appendices were negotiated, an employee with between one and five years of service would have received severance pay under article 53.4(a)(4) if she had resigned from the public service after receiving official notice that the facility where she worked was about be transferred from the crown to another employer. The right to severance pay in these circumstances was clearly expressed in this article. I conclude this entitlement continues to exist today because it was not clearly negated when the parties fashioned … Appendix 18. (pages 10 to 12)

III

Transfers of work to a new employer under Schedule A are governed by section 5 of Appendix 18. The relevant portions of this section state:

5.1 In respect to the transfer of bargaining unit functions or jobs as the result of Schedule A transfers, the employees that the Employer determines will be included in the Request for Proposal (RFP) will be notified not less than ten (10) working days prior to the release of the RFP that their jobs will be included in the RFP and provided the opportunity to elect in writing within five (5) working days of being notified, not to be included in the RFP. In default of the election, the employee is deemed to be included in the RFP.

5.2 Employees who elect not to be included in the RFP will be declared surplus. The date of the surplus notice will be determined by the employer. Upon receipt of the surplus notice, the affected employee will exit the OPS immediately, these employees will receive only the benefits set out below:

(ii) termination payments in accordance with Article 53 or 78.

5.5 Employees included in the RFP and who do not accept a job offer under this provision will be deemed to have resigned and no other provisions of the Collective Agreement will apply except for Article 53 or 78 (Termination Pay).

5.6 Employees who accept a job offer in accordance with Article 5.3 with a receiving employer will be deemed to have resigned effective the date they commence employment with the receiving employer, and no other provisions of the Collective Agreement will apply except for Article 53 or 78 (Termination Pay). (emphasis added)

According to section 5.2, employees who elect not to be included in an RFP “will be declared surplus”. As noted by employer counsel, the clear implication of this section is that those making the opposite election—i.e. to be included in the RFP—will not be declared surplus. Employees who elect to be included in an RFP “will be deemed to have resigned” if they reject a job offer from the new employer (section 5.5). or if they accept one (section 5.6) In short, employees who employees who opt out of an RFP are declared surplus, whereas those who opt in are not declared surplus and are deemed to have resigned.

This treatment under section 5 of employees affected by a Schedule A transfer may be contrasted with how section 6 treats employees falling under Schedule B. Section 6.1.2 indicates the entire set of such employees “will be declared surplus.” The subset of employees who take a job with the receiving employer (section 6.4), and the subset who reject a “good” job offer (section 6.5), are “deemed to have resigned.” Resigning and being declared surplus are normally understood to be the opposite of one another. The ambiguity in section 6 arises from the apparent conflict between deeming certain employees to have resigned while also including the very same employees among those declared surplus. There is no such conflict nor ambiguity in section 5. Employees who opt out of an RFP are declared surplus. Those who opt in are not declared surplus; instead they are deemed to have resigned.

It is only reasonable to assume the division of employees into two categories—those who are declared surplus under section 5.2 and those who are deemed to have resigned under sections 5.5 or 5.6—was intended to serve some purpose. The most obvious purpose is to differentiate between these two groups of employees in relation to severance pay. In coming to this conclusion, I note sections 5.2, 5.5 and 5.6 all include a reference to articles 53 and 78 governing entitlement to severance pay. According to those articles, an employees with between one and five years of service is entitled to such pay if the individual is released from employment, but not if he or she resigns without having been declared surplus. As employees who opt out of an RFP are declared surplus, those with between one and five years of service are entitled to severance pay because they have been released from employment. As employees who opt into an RFP are not declared surplus and are deemed to have resigned, those with between one and five years of service are not entitled to severance pay.

IV

Transfers of work to a new employer under Schedule C are governed by section 6C of Appendix 18. The relevant portions of this section state:

6C.1 In respect to the transfer of bargaining unit functions or jobs as the result of Schedule C transfers, the employees that the Employer determines will be included in the Request for Proposal (RFP),will be notified not less than ten (10) working days prior to the release of the RFP that their jobs will be included in the RFP and provided the opportunity to elect in writing within five (5) working days of being notified, not to be included in the RFP. In default of the election, the employee is deemed to be included in the RFP.

6C.2 Employees who elect not to be included in the RFP will be declared surplus. The date of the surplus notice will be determined by the employer. Upon receipt of the surplus notice, the affected employee will exit the OPS immediately, these employees will receive only the benefit set out below:

(ii) termination payments in accordance with Article 53 or 78.

6C.3.1 For employees electing to be included in the RFP, the Employer shall include, in the RFP, the mandatory requirement that proponents must commit in their proposal to make job offers to the identified classified OPSEU employees for 100% of the positions, in the receiving employer’s workplace, which are created as a result of the RFP.

6C.3.3 If more employees elect to be included in the RFP, in accordance with Article 6C.1, than the full complement of positions created by the RFP, the proponent must make job offers on the basis of seniority. Employees may decline job offers in descending order of seniority until the number of persons who have declined job offers is equal to the difference between the number of employees in the RFP and the number of positions created by the RFP. These employees will be entitled to all rights and entitlements in Article 6C.2.

6C.3.3.1 Other employees who decline job offers to the extent that the full complement of positions created cannot be filled, will be deemed to have resigned and no other provisions of the Collective Agreement will apply except for Article 53 or 78 (Termination Pay).

6C.5 Employees included in the RFP and who do not accept a job offer under this provision, with the exception of employees covered by Article 6C.3.3, will be deemed to have resigned and no other provisions of the Collective Agreement will apply except for Article 53 or 78 (Termination Pay).

6C.6 Employees who accept a job offer in accordance with Article 6C.3.4 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). (emphasis added)

Section 6C is identical to section 5 in two important respects: (1) employees who elect not to be included in an RFP “will be declared surplus” (section 6C.2); and (2) employees who accept a job with the receiving employer are not declared surplus and are “deemed to have resigned” (section 6C.6).

For present purposes, there is one important difference between section 6C and section 5. Section 5.3 states an RFP must require proponents to offer jobs to all employees who elect to be included in the RFP. In other words, everyone included in the RFP is guaranteed a job offer. With a enough work for all, employees who opt into an RFP and later decline an offer of employment are “deemed to have signed.” In contrast, section 6C.3.1 states an RFP must require proponents to offer to employees who opt into the RFP 100% of the jobs created by the transfer of work, but section 6C.3.3 acknowledges the number of employees opting in may exceed the number of jobs created by the transfer and therefore on offer. According to section 6C.3.3, when there is not enough work to go around, “the proponent must make job offers on the basis of seniority” and “employees may decline job offers in descending order of seniority” so long as no jobs go unfilled. Section 6C.3.3 goes on to say employees who decline a job offer in this way “will be entitled to all the rights and entitlements” afforded to those who opt out under section 6C.2. All others who decline job offers are “deemed to have resigned” by section 6C.3.3.1 and 6C.5

How do articles 53 and 78 apply to employees, with between one and five years of service, whose work is transferred to a new employer under Schedule C? As employees who opt out of an RFP are declared surplus, they are entitled to severance pay as having been released from employment. The same entitlement is enjoyed by employees who opt into an RFP and then later decline a job offer under section 6C.3.3. All other employees who decline an offer of employment are not entitled to severance pay, because they are declared surplus and are deemed to have resigned. The same is true of employees who accept a job with the new employer.

Dated at Toronto this 16th day of July 2003.