GSB# 2001-0555

UNION# OLB257/01

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Ontario Liquor Control Boards Employees’ Union (Policy Grievance)

Grievor

• and -

The Crown in Right of Ontario (Liquor Control Board of Ontario)

Employer

BEFORE

Mary Lou Tims

Vice-Chair

FOR THE UNION

Ursula Boylan Koskie Minsky Barristers and Solicitors

FOR THE EMPLOYER

Myfanwy Marshall Counsel, Liquor Control Board of Ontario

David Spears Heenan Blaikie Barristers and Solicitors

HEARING

October 11, 2001; May 22 and September 10, 2003.

AWARD

This policy grievance before me dated June 26, 2001 alleges a breach of article 22.2 (b) of the parties’ collective agreement which reads as follows:

Uniforms, Attire and Special Allowances

22.2 (a) Maintenance employees, in LCBO Warehouses, will be issued two (2) clean shirts and two (2) clean pairs of trousers per week, the cost of which shall be the responsibility of the Employer.

(b) All other employees, in LCBO Warehouses, assigned to a classification which was previously eligible for uniforms, shall be issued a lump sum payment of four hundred dollars ($400.00) payable on September 1, 2000 and no later than the first pay in the month of September annually thereafter.

There were no objections with respect to my jurisdiction to hear and determine the grievance.

The Union takes the position that article 22.2(b) of the collective agreement is clear in requiring the Employer to pay the sum of $400 to eligible employees. In its submission, the Employer violated the collective agreement in paying $400 less deductions. While the Union does not dispute that the said payment constitutes a taxable benefit under the Income Tax Act, R.S.C. 1985, c.1, it submits that employees are entitled to net payments of $400. In the alternative, the Union argues that the language in issue is latently ambiguous, and that I should admit and rely upon evidence of negotiating history to establish and resolve such alleged ambiguity.

The Employer asserts that the language of article 22.2(b) is clear, and that the sum of $400 referred to therein must be regarded as a gross figure. Counsel thus argues that the Employer complied with its obligation thereunder, in paying to each eligible employee the sum of $400 less deductions, and that the grievance before me must be denied. Given its position that the relevant language here is clear and unambiguous, Counsel argues that there is no basis upon which I can properly consider extrinsic evidence as an aid to interpretation.

After hearing the parties’ submissions with respect to extrinsic evidence, I ruled that I would receive the evidence in issue, but that I would not rely upon it unless ultimately satisfied that the language before me is ambiguous.

THE EVIDENCE

The Union called as witnesses Mr. John Coones and Ms. Jean Chaykowski. Mr. Coones has been the Union President for twelve years, and has been the Union’s Chief Negotiator in every round of collective bargaining since 1990. Ms. Chaykowski has been employed by the Union as a Grievance Officer for twenty-five years, and was a member of the Union’s bargaining team during negotiations for the 2000 - 2002 collective agreement, under which the grievance before me arises.

Mr. Wayne Zachar gave evidence for the LCBO. Mr. Zachar has held the position of Director of Employee Relations since 1996. He has been involved in five sets of negotiations between the parties, and was the Employer’s Chief Spokesperson in the 2000 round of collective bargaining.

Subject to the Employer’s position that there is no basis upon which extrinsic evidence is properly

relied upon in these proceedings, the parties called evidence with respect to collective bargaining in 2000 as it pertained to the provision here in issue.

Prior to the parties’ 2000 negotiations, article 22.2 of the collective agreement read as follows:

Employees in the LCBO warehouses will be issued two (2) clean shirts and two (2) clean pairs of trousers per week, the cost of which shall be the responsibility of the Employer.

Mr. Zachar testified that management in the Employer’s Logistics Division had “an issue” with article 22.2, that it found it “troublesome administratively,” and that it felt that “most employees” did not wear uniforms anyways. Mr. Zachar stated that the wearing of uniforms in the Warehouse was not enforced.

The issue of whether or not Warehouse employees wore the uniform previously supplied by the Employer was addressed by the parties. While the evidence in this regard varied, the parties agreed that not all employees wore the uniform. Mr. Coones believed that “many” wore it although he acknowledged that the Union did not understand article 22 to require this. Similarly, also in evidence before me was an excerpt from the October 2000 issue of The Echo, the Union’s bimonthly newsletter, indicating that prior to 2000 negotiations, “many logistics employees did not wear the uniforms which were provided under the agreement.”

On January 19, 2000, the Employer tabled a proposal during collective bargaining to delete article 22.2 of the collective agreement and to replace it with “a lump sum payment.” The evidence was clear that there was little discussion between the parties that day regarding the Employer’s proposal. Mr. Coones testified however, that the Union understood that the Employer wished to “get away from supplying clothing” to Warehouse employees, and that it was therefore offering compensation.

The Employer’s proposal regarding article 22.2 was again addressed on January 20, 2000, at which time the Union requested the cost of supplying and cleaning uniforms under the language in effect at the time.

The discussions between the parties on February 8, 2000 are key, and the parties differ somewhat in their recollections of what transpired that day. There is no dispute that Mr. Zachar advised the Union at the bargaining table that day that the Employer was spending $444 per employee to supply and clean uniforms. It is also common ground between the parties that Mr. Coones asked what the Employer was proposing in terms of a lump sum payment, and that Mr. Zachar indicated that it was offering $400. Mr. Zachar testified in these proceedings that Logistics management was prepared to have a “net even result,” but that the Employer was leaving itself “wiggle room,” in tabling this offer.

Mr. Coones testified that he responded at that point that this would be a “real bargain” for the Employer, and that Mr. Zachar then stated “$400 — cash in hand.” Mr. Coones gave evidence that he mentioned that it was not possible to compare the Employer’s cost, and the cost to employees who would not buy or lease in mass quantities. Mr. Coones was also clear that he stated at the bargaining table that employees needed “$400 to spend on clothing and cleaning.”

Mr. Coones referred to bargaining notes taken on the Union’s behalf by its business agent, and bargaining team member, Mr. Heino Nielsen. Such notes as they pertained to February 8 discussions regarding article 22.2, recorded the Employer’s information regarding cost, and its offer of $400.

Mr. Coones was asked in examination-in-chief to explain his comment that the Employer would be getting “a bargain,” and he referred to the fact that the Employer would save “$44 per employee right off the top.” In cross-examination, Mr. Coones maintained that the Employer would be “getting a bargain” even if the $400 offered was “grossed up,” as the Employer in his view, would no longer have the “headaches” associated with supplying uniforms.

Ms. Chaykowski also gave evidence with respect to the parties’ discussions on February 8, 2000. She remembers Mr. Zachar saying at the bargaining table that employees would get “cash in hand, cash in the bank.” She referred to her bargaining notes which record Mr. Zachar’s statement, “$400 — cash in the bank.” Ms. Chaykowski was clear that she understood from Mr. Zachar that employees would receive $400 for clothing.

Ms. Chaykowski further testified that the Employer would save $44 per employee based on its offer, as well as the costs associated with an employee who would have been responsible for uniforms. She agreed, however, that those employees who did not previously wear the uniform would “get something” by virtue of the Employer’s proposal.

Mr. Zachar also testified with respect to the February 8 discussions regarding article 22.2. He recalled that after offering $400 to the Union, Mr. Coones responded that this was “a bargain.” Subject to the Union’s objection, Mr. Zachar testified that he then stated, “It is money they don’t have now — cash in the bank, cash in hand.” In cross-examination, Mr. Zachar explained that this was a “selling point,” in that he was seeking to convince the Union that because “most” or “many” employees didn’t wear uniforms, this proposal was “value added.”

Mr. Zachar referred to notes taken during bargaining on the Employer’s behalf, by Mr. John Harris. Such notes as they relate to the February 8 discussions regarding article 22.2 reflect Mr. Zachar’s offer of $400, and Mr. Coones’ response, “That’s a bargain,” followed by Mr. Zachar stating “Cash in hand.”

Mr. Coones testified in Reply that he did not recall Mr. Zachar commenting on February 8, 2000, “It’s money they don’t have now.” While he acknowledged that Mr. Zachar could have made such statement, he believed he would have remembered if this had been the case.

The parties again met and discussed article 22.2 on February 16, 2000. There is no dispute that the Employer at that time offered a one-time payment of $800 to each employee. Such proposal was not acceptable to the Union.

On March 6, 2000, the Employer proposed replacing article 22.2 with a $450 annual lump sum payment inclusive of safety shoes. Mr. Coones gave evidence that the safety boot allowance provided for under the collective agreement had never been subject to tax. The Union did not agree to such proposal and pointed out that after deducting the sum allocated for safety shoes, this amounted to an offer of $325 for clothing. Mr. Zachar testified that he stated at the bargaining table that employees “can choose how to spend” the money offered by the Employer, such comment recorded in the bargaining notes of both Mr. Harris and Mr. Nielsen. Mr. Coones and Ms. Chaykowski were clear, however, that given the context of the parties’ discussions, they nonetheless viewed the payment in issue as a clothing allowance.

The evidence establishes that on March 7, 2000, the Union proposed a payment of $450, excluding safety boots, to be optional for Maintenance employees in the Warehouse. The Employer responded by subsequently tabling the following proposal:

“22.2(a) Maintenance employees in an LCBO Warehouse will be issued two (2) clean shirts and two (2) clean pairs of trousers per week, the cost of which shall be the responsibility of the Employer.

22.2(b) All other employees, in an LCBO Warehouse, who were previously eligible for uniforms, shall be issued a lump sum payment of $400.00 payable the first of the month following ratification and annually thereafter.”

Mr. Coones testified that he indicated to the Employer on March 7, 2000, that Warehouse employees “were ok” with this offer if they were “going to get $400 to spend on clothing and cleaning.”

The parties again addressed article 22.2 on March 8, 2000, and agreed to the language before me on March 9, 2000.

The evidence established that a memorandum of agreement was signed by the parties July 14, 2000, and subsequently ratified August 11, 2000. Excerpts from the memorandum were filed as evidence before me, including the following provisions:

“The Employer agrees to pay to each permanent employee employed by the Employer on the date this Memorandum of Settlement is signed, an amount which would provide such employee with a net payment, after deductions, of five hundred dollars ($500) by separate cheque or direct deposit not later than August 31, 2000.

The Employer agrees to pay to each casual employee employed by the Employer on the date this Memorandum of Settlement is signed, an amount which would provide such casual employee with a net payment, after deductions, of three hundred ($300.00) by separate cheque or direct deposit no later than August 31, 2000.”

Also in evidence before me was a document prepared by the Union entitled Tentative Contract Settlement Reached At Conciliation. Such document purports to summarize the terms of the parties’ settlement and states as follows:

Wage Increase . . .

3% retroactive to April 1, 2000 and effective April 1, 2001 another 3% . . . .

Lump Sum Payment . . .

Permanent Employees will receive $500.00 after taxes in separate cheque or direct deposit no later than August 31, 2000. . . .

Casual Employees will receive $300.00 after taxes in a separate cheque or direct deposit no later than August 31, 2000.

Uniforms . . .

Except for maintenance employees workers at logistics who were provided with clean shirts and pants will instead begin to receive a monetary payment of $400.00 per year.

Mr. Coones acknowledged that the said document does not indicate that employees would receive a net payment of $400, but explained that this was because the Union did not believe such payment to be taxable.

Evidence was given by the parties regarding the negotiation of the lump sum payments in the 2000 memorandum of settlement. Mr. Coones explained that the Union was hesitant to agree to such payments after having done so in 1998 with negative reaction from its members. The 1998 language was placed in evidence before me, and provided as follows:

Lump Sum Payments

Effective the date of ratification by the Employer, all permanent employees in the employ of the Employer, shall receive a lump sum payment of nine hundred dollars ($900.00) less deductions for income tax purposes.”

Mr. Zachar testified that after ratification of the 2000 collective agreement, he was advised that the $400 payment contemplated by article 22.2 was indeed taxable. He acknowledged that he was “surprised” to learn this. He notified Mr. Coones by e-mail dated August 28, 2000, and “anticipated problems.” Mr. Coones stated that he raised the issue with Mr. Zachar a few times subsequently, pointing out that the intention at the bargaining table was that employees would receive $400 and not something less. He did not recall Mr. Zachar ever disagreeing with such characterization of the parties’ agreement.

It is common ground that the Employer purported to comply with its obligations under article 22.2(b) by paying to eligible employees the sum of $400 less deductions.

Mr. Coones’ evidence was that he understood that employees would receive $400 pursuant to article 22.2, and not $400 less deductions. He stated that the Union would not have accepted the Employer’s offer had it understood that employees would receive less than $400. He testified that he stated a couple of times during bargaining that employees “had to have $400 to spend.” Mr. Zachar acknowledged that Mr. Coones commented accordingly, but indicated that he viewed this as “posturing” by the Union. Mr. Coones also relied on his comment during bargaining that employees would not have the same “buying power” as did the Employer. Again, Mr. Zachar recalls such discussion. Further, Mr. Coones testified that he understood that employees would receive $400, based on his recollection of Mr. Zachar saying, “$400 — cash in hand.” Mr. Coones explained that he did not believe at the time that the $400 which the Union regarded as a clothing allowance was taxable. The parties stipulated for present purposes that the safety boot allowance provided under the collective agreement had never been taxable, and Mr. Coones indicated that he understood that the payment in issue here would be treated similarly.

Ms. Chaykowski also testified that she understood that employees would receive $400, noting that there was no mention during bargaining of deductions. She agreed that there were many issues on the table during 2000 negotiations, and that relatively little time was spent on article 22.

Mr. Zachar gave evidence that the article 22.2 language here in issue was one of approximately 250 proposals considered by the parties in 2000 negotiations, and that “not a lot of time” was devoted to it. He stated that there was no discussion during bargaining with respect to deductions, taxes or net payments in relation to the $400 payment. Mr. Zachar testified that the Employer never intended that the payment in issue would be a net payment. He agreed in cross-examination that during bargaining, he was operating on the assumption that such sum was not taxable, characterizing it as a transfer of expenses. He candidly acknowledged that the “notion of tax” simply did not enter his mind, and he noted that the Finance Department representative on the Employer’s bargaining team who would have advised on such matters, had “a poor attendance record” at negotiations. He agreed that it would not have been unreasonable for the Union to conclude that each employee would receive $400.

Mr. Zachar testified that the Employer “would not likely have agreed” to the proposal in issue if a net payment of $400 were required. He indicated that the Employer “avoids” such payments, as they “can be difficult.” Mr. Zachar described that it would be necessary to do an individual calculation for each of the three hundred affected employees to determine the sum payable to arrive at a $400 net payment, and that he did not know if such “laborious” calculation could be made until after the individual’s annual income and deductions were known. He had “no idea” of the cost to the Employer if the $400 was to be treated as a net payment.

Mr. Zachar compared the payment contemplated by article 22.2 with a general wage increase. He noted that the parties do not specify that a wage increase is subject to tax, and yet statutory deductions are made.

THE ARGUMENT

The Union asks me to uphold its grievance on the basis of what it asserts to be the clear language of article 22.2(b). Counsel submits that the said provision requires that the Employer pay to eligible employees the sum of $400, and that the Employer violated the collective agreement in paying something less.

The Union suggests that the Employer here erred in failing to appreciate that the payment in issue was taxable, and that the Employer in effect asks that I rectify the collective agreement, and read into it that the $400 payment was subject to deductions. The Union argues that there is no basis upon which I can properly do so here, relying upon Re FPC Flexible Packaging Corp. and Graphic Communications International Union, Loc. 500M (2002), 2002 CanLII 79040 (ON LA), 108 L.A.C. (4th) 327.

In the alternative, the Union submits that the language in issue is latently ambiguous, and on that basis it asks that I rely upon extrinsic evidence of negotiating history to resolve such alleged ambiguity.

Counsel asks me to consider all of the evidence, and to conclude that the parties intended that employees would receive the sum of $400 each. She suggests that the evidence pertaining to the parties’ negotiations on February 8, 2000 is of particular significance. The Union urges me to find that Mr. Zachar on that day represented to the Union that employees would receive “$400 cash in hand.” Counsel asks me to reject Mr. Zachar’s evidence that he also stated on February 8, 2000 that “It is money they don’t have now.” The Union notes Mr. Coones’ evidence, accepted by Mr. Zachar, that he advised the Employer during bargaining, that employees needed “$400 to spend on clothes.” The Union further relies upon Mr. Coones’ testimony that he discussed at the bargaining table the fact that employees individually would not have the same “buying power” as the Employer, and would not be able to take advantage of discounted costs. Counsel notes as well that when Mr. Coones commented in bargaining on March 6, 2000 that the Employer’s offer of $450 for clothing and safety boots would only leave $325 for clothing, there was no evidence that the Employer suggested that such amount would be subject to deductions. The Union submits that its understanding that the payment in issue would not be taxable was “reinforced” by the fact that the Employer tabled a single proposal pertaining to safety shoes and clothing allowance on March 6, 2000, safety shoes not subject to tax. Further, Counsel suggests, Mr. Zachar’s reaction upon learning post-ratification that the payment in issue was taxable is noteworthy, as is Mr. Coones’ undisputed evidence that Mr. Zachar did not disagree when Mr. Coones insisted that the parties intended employees to receive $400.

The Union argues that it thus understood in bargaining that employees would receive $400 each, and indeed Mr. Zachar acknowledged in cross-examination that such belief was not unreasonable.

The Union further relies upon the parties’ 1998 and 2000 memoranda of settlement, and asks me to find that the parties have clearly indicated where lump sum payments are subject to deductions. It asks that I consider the silence on the issue of deductions in the current article 22.2(b) in that context.

The Union suggests that neither party believed that the $400 payment here in issue was taxable during collective bargaining, and that there was no reason for the Union under such circumstances to demand language providing for a net payment. In the Union’s submission, the Employer was mistaken in its understanding of the tax implications of its proposal, and the burden of such mistake must be borne by the Employer. In Counsel’s submission, it is the Employer’s obligation to remit tax, and it is up to the Employer to be aware of its obligations in this regard. The extrinsic evidence before me, Counsel submits, is clear and cogent and establishes that both parties understood that employees were to receive $400. Whether or not such agreement is difficult for the Employer to administer is not the issue, Counsel argues. Rather, I must hold the parties to their agreement, uphold the grievance, and order the Employer to pay to each eligible employee the sum necessary to top up the payments made to $400.

The Employer in response argues that the Union here seeks a financial benefit. Counsel submits that arbitrators recognize that clear language is required to express the intention to confer such a benefit, relying upon Canadian Labour Arbitration, Brown and Beatty, 3rd Ed., Re Canada Post Corp. and C.U.P.W. (1993), 1993 CanLII 16663 (CA LA), 39 L.A.C. (4th) 6, and Re Cardinal Transportation B.C. Inc. and C.U.P.E., Loc. 561 (1997), 1997 CanLII 25143 (BC LA), 62 L.A.C. (4th) 230 in support of such proposition. He suggests that the Union must establish with clear evidence therefore that the parties intended that the Employer would pay an amount in excess of $400 for each employee, so as to net each employee the sum of $400.

The Employer further argues that article 22.2(b) is clear and unambiguous in requiring a lump sum payment of $400 to eligible employees. Such payment, Counsel asserts, is not an allowance, and the evidence establishes that it need not be spent on clothing. Counsel notes that the Union does not contest the Employer’s assertion that such payments are taxable, but merely takes the position that it is for the Employer to make whatever payment is required so that each affected employee receives a net $400. In the Employer’s submission, the clear language before me does not provide for such result.

The Employer refers to section 153 (1) of the Income Tax Act which states as follows:

Payment of Tax

(1) Withholding — Every person paying at any time in a taxation year

(a) salary, wages, or other remuneration. . . .

shall deduct or withhold from the payment the amount determined in accordance with prescribed rules and shall, at the prescribed time, remit that amount to the Receiver General on account of the payee’s tax for the year . . . .

The Employer argues that it is an employee earning salary, wages or other remuneration who is required to pay income tax under the provisions of the Act, and that its obligation is merely to withhold tax on an employee’s behalf. An employee’s earnings, Counsel submits, are not reduced by the amount withheld. Rather, such amount continues to be income of an employee remitted on his or her behalf to the government. The Employer argues in effect, therefore, that it has paid to each eligible employee the sum of $400 as required by article 22.2(b), but that it has also fulfilled its obligation to remit a certain portion of such payment to the Receiver General. Such remittance pursuant to the Income Tax Act does not, Counsel submits, alter the fact that eligible employees have been issued $400 in accordance with the collective agreement.

While the Employer does not concede that the language before me can be reasonably interpreted in the manner advanced by the Union, Counsel suggests nonetheless that where two different interpretations of language are possible, one must look at the reasonableness of each in determining what the parties intended. Counsel argues that it would be an “astronomical problem” for the Employer to determine how much would be payable to each individual employee to arrive at a net payment of $400. The Employer further submits that the Union’s position here necessarily gives rise to “variability” in the amounts paid to different employees, those in higher tax brackets requiring a higher gross payment to yield the $400 net payment than those in a lower tax bracket. Given such alleged anomalies, the Employer submits, very clear language would be required to conclude that this was what the parties intended. Counsel refers to the decisions in Re International Assn. of Machinists and Aerospace Workers, Loc. Lodge No. 482 and Airconsol Aviation Services Ltd., [1998] C.L.A.D. No. 651 and Re Hamilton Entertainment and Convention Facilities Inc. and International Alliance of Theatrical Stage Employees and Moving Picture Operators of United States and Canada, Loc. 129 (1996), 1996 CanLII 20351 (ON LA), 52 L.A.C. (4th) 178.

Counsel for the Employer further urges me to read article 22.2(b) in light of the parties’ 2000 memorandum of settlement in its entirety. The Employer asks that I conclude that where the parties have intended payments to be net, they have been careful to express that in very clear terms. Article 22.2(b) is to be contrasted accordingly, Counsel submits.

The Employer asks me to note that contractual provisions with respect to wages, for example, are silent on the issue of tax treatment, and yet no one would suggest that the Employer has failed to adhere to the wage scale included in the collective agreement because the necessary statutory deductions were made.

In the alternative, the Employer argues that even if the language in issue before me is regarded as latently ambiguous as submitted by the Union, the extrinsic evidence adduced by the parties would not permit me to conclude that the collective agreement has been breached.

Counsel asks me to bear in mind that the evidence here pertained to negotiations between two sophisticated parties, both with experienced spokespeople. Ultimately, he argues, the language agreed to by the parties must determine the rights and benefits in issue. One must be very cautious, Counsel suggests, in attributing great significance to bargaining table discussions in the face of clear contractual language. The parties are not, Counsel points out, giving evidence during negotiations, but are engaged in a process aimed at selling the position they are advancing. Counsel commends to me the comments of the board of arbitration in Re Sudbury District Roman Catholic Separate School Board and O.E.C.T.A. (1984), 1984 CanLII 5134 (ON LA), 15 L.A.C. (3d) 284.

In any event, Counsel suggests that the Union here relies largely upon Mr. Zachar’s alleged February 8, 2000 comment that employees would receive $400 “cash in hand.” The Employer suggests that even the Union’s evidence as to what was said by Mr. Zachar is not consistent. The Employer argues further that such comment must be considered in context. Mr. Zachar was clear that he understood that most employees in the Warehouse were not wearing uniforms under the former collective agreement provisions, and were therefore, reaping no benefit from the previous language. He viewed it as a selling point to the Union that such employees could only gain from any monetary payment, as they would receive monies without relinquishing any benefit of which they were availing themselves. Mr. Zachar also testified that the Employer sought to be relieved of its obligation to supply uniforms, that it had been paying $444/employee on account of uniforms, and that it was prepared to accept a “net even result.”

Counsel also asks me to consider the parties’ exchange on February 8, 2000 in the context of Mr. Coones’ acknowledged comment that the Employer’s offer of $400 was “a bargain.” The Employer suggests that such payment could only be construed accordingly if the Employer was in fact liable for a payment less than $444, and not if it was to be “grossed up” to a higher figure, resulting in a net payment of $400.

Further, the Employer suggests that even if I accept the Union’s evidence as to what was said on February 8, 2000, Mr. Zachar’s comments cannot be regarded as a clear representation to the Union that employees would receive a net amount of $400. Rather, the Employer argues, Mr. Zachar’s discussions with the Union remain ambiguous at best with respect to the issue before me, and cannot assist in determining the parties’ mutual intentions. The evidence, Counsel asserts, merely establishes that the parties did not address the tax implications of the provision in dispute. It does not follow from this that they mutually intended that the Employer would pay out a sum in excess of $400 to each eligible employee. This, coupled with the fact that the comments relied upon were made on only one occasion, with several different proposals following before agreement was reached, should lead me to conclude, the Employer argues, that the interpretation of article 22.2(b) urged upon me by the Union cannot be accepted. Counsel argues that the Union must adduce clear, cogent and unequivocal evidence to support the construction of the language it advances before me, and that it has failed to do so. The Employer refers to Canadian Labour Arbitration, supra, and the decision in Re Strait Crossing Joint Venture and International Union of Operating Engineers (1997), 1997 CanLII 24946 (NS LA), 64 L.A.C. (4th) 229.

In addition, the Employer suggests that the Union here seeks to rely upon its assumption that the payment in issue was not taxable. Counsel submits that there was no obligation on the Employer in collective bargaining to advise the Union of the tax implications of proposals considered by the parties, and that the Union here asks me in effect to provide for a net payment of $400, despite the failure of the parties to negotiate that. Counsel urges me to conclude that there is no basis upon which I can properly do so, and asks that I deny the grievance.

THE DECISION

Both parties argue that the language of article 22.2(b) is clear, and supports the position that they advance in these proceedings. The said provision requires that the Employer issue to all eligible employees “a lump sum payment of $400.” The Union does not challenge the Employer’s assertion that such payment is properly treated as a taxable benefit for purposes of the Income Tax Act, and I therefore proceed on the basis that this is so. The issue before me is simply whether the collective agreement requires a payment of $400 after tax to eligible employees, or a payment of $400 less deductions.

I accept at the outset the Union’s argument that I must interpret the collective agreement before me, and that I have no jurisdiction here to “read into” the contract provisions which the parties did not negotiate.

I also accept the Employer’s position that clear language is generally required before the intention to confer a monetary benefit is construed from contractual language. I refer in this regard to Re Cardinal Transportation, supra, where Arbitrator Devine stated:

“Where a monetary benefit is asserted, it normally falls to the Union to show in clear, specific and unequivocal terms that the monetary benefit is part of the employee’s compensation package. Such an intent is not normally imposed by inference or implication.” (at p.5, QL version)

The Union submits that article 22.2(b) is “clear, specific and unequivocal” in requiring the Employer to pay to each eligible employee the sum of $400, after deductions. While I have carefully considered the Union’s position, I am not convinced that the clear language of the collective agreement provides for such result.

In reaching this conclusion, I have considered article 22.2(b) in the context of other provisions of the memorandum of agreement signed by the parties in July 2000. The parties agreed therein to “a net payment after deductions” of either $500 or $300, depending on employee status. During 2000 negotiations, therefore, the parties clearly and expressly addressed, at least in these instances, where lump sum payments were intended to be net payments. I accept the Employer’s argument that their failure to use similar language in the same memorandum of agreement to describe the payment required under article 22.2(b) must be regarded as telling.

I have also considered section 153(1) of the Income Tax Act, setting out the Employer’s obligation to withhold and remit to the Receiver General the required sums from salary or wages. There is no dispute here that the Employer did indeed issue gross payments of $400 for affected employees, the Union merely arguing that such employees should each have received net payments of $400. The Employer submits, however, and I accept, that the fact that it is statutorily required to remit a portion of such payment to the Receiver General on behalf of each affected employee does not alter the fact that each such employee has been “issued a lump sum payment of $400.” In cross-examination, Mr. Zachar made the point that a wage settlement is treated in the same fashion. He testified that where the parties negotiate a 2% wage increase, for example, they do not specify that such increase is subject to deductions, and yet the Employer when implementing such increase, deducts tax. Union Counsel suggested in cross-examining Mr. Zachar that the key difference is that “people are well aware that they have to pay taxes on wages.” With respect, however, I do not see that this alters the interpretation of collective agreement language which the Union asserts to be clear on its face.

The case before me bears certain similarity to the decision in Re Airconsol Aviation Services, supra, and I find Arbitrator Outhouse’s conclusions helpful in considering the issue before me. The collective agreement there required that the employer would “assume the full cost, if any, of parking....” The employer rented parking spaces for the use of its employees, and treated the provision of free parking to employees as a taxable benefit, resulting in a slight increase in income tax and CPP deductions. The Union argued that the employer was obliged to assume the “full cost” of parking. By treating parking as a taxable benefit, the Union asserted, employees were subjected to increased deductions for income tax and thereby incurred a cost for parking. This, the Union submitted, constituted a violation of the collective agreement.

In dismissing the grievance before him, Arbitrator Outhouse stated as follows:

“It must be taken as a given, therefore, that the Employer is required by law to treat the cost of providing free parking to employees as a taxable benefit and to make appropriate deductions for income tax and CPP in relation thereto. The only question which remains to be decided, therefore, is whether the Employer is somehow obliged to reimburse employees in order to offset the tax impact of such treatment.

I have concluded that the Employer is not so obliged. Article 20.05 requires the Employer to assume the full cost of providing parking to employees. In fulfillment of this requirement, the Employer has leased parking spaces from Transport Canada for which it pays the entire cost, including HST. The fact that parking is a taxable benefit under the Income Tax Act is not of the Employer’s doing. Neither does it increase the cost of providing parking. What it does do is increase the taxable income of employees which, in turn, increases their deductions for income tax and CPP. Such deductions are not parking cost. Rather, they are provisional amounts which are remitted to Revenue Canada by the Employer based upon a statutory formula. Whether a particular employee will ultimately be out of pocket by the amount of the increased deductions is impossible to say with any certainty. As pointed out by the Employer, tax impacts vary from employee to employee depending upon their total taxable income and allowable deductions. Liability for income tax and CPP contributions is ultimately a matter which rests between the individual taxpayer and Revenue Canada. The extent of such liability may well be affected by the provision of free parking, but that effect, whatever it turns out to be in any individual case, cannot be said to be a parking cost.

To put the matter a slightly different way, when the parties used the words ‘full cost . . . of parking’ in Article 20.05, I am satisfied that what they had in mind was the charge or charges for the physical parking facilities. It is highly unlikely, in my view, that they had within their contemplation possible tax consequences of providing free parking to employees. Indeed, it would be impossible to ascertain such a ‘cost’ until the end of the taxation year and the impact would vary from employee to employee. In my judgment, this variability is a telling indicator that what we are dealing with here is not a parking cost at all. It is not a part of the consideration being paid for the physical parking facilities. Rather, it is a tax liability that is imposed upon the employees by operation of law in circumstances where their employer provides them with free parking.” (at paras. 9, 10, and 11)

I recognize, as pointed out by Union Counsel, that the collective agreement before me requires payment of a specific sum in contrast to the language before Arbitrator Outhouse. I note that here too, however, the Union’s argument necessarily contemplates a certain variation in the amount payable to each employee to arrive at a net payment of $400, depending upon individual tax circumstances. The Union pointed out during these proceedings, that whether or not the Employer required that the monies in issue be applied towards clothing costs, the Union regarded such payment as a clothing allowance. It asked me to note that the contractual provision in question here is found under the heading “Uniforms, Attire and Special Allowances.” In my view, such “variability” in what the Employer would be required to pay on account of what the Union characterizes as “clothing allowance,” is a “telling indicator” here as well in considering the language of article 22.2(b).

After considering all of the evidence, therefore, I must conclude that the Employer did not violate the clear language of article 22.2 (b) in paying to eligible employees the sum of $400 less deductions. Accordingly, in my view, the grievance before me must be denied on the basis of the clear language of article 22.2(b).

Even if I were to accept the Union’s alternate position that such evidence reveals a latent ambiguity in article 22.2 (b), and that evidence of the parties’ negotiating history should be relied upon therefore as an aid to interpretation, my conclusion with respect to the disposition of the grievance would be the same.

I have considered the decision in Re Sudbury District Roman Catholic Separate School Board, supra, relied upon by the Employer, and although Arbitrator Adams was there addressing an allegation of estoppel arising out of discussions during collective bargaining, the views he expresses are equally apt in the present context:

“I emphasize that evidence establishing an estoppel in the form of a representation made during negotiations and inconsistent with the clear wording of a collective agreement must be in the form of clear and cogent evidence. Labour relations statutes in all Canadian jurisdictions require that a collective agreement be in writing and it is simply too easy for parties in difficult negotiations, on the conclusion of a collective agreement, to allege that representations were made contrary to the document signed. Much is said in collective bargaining negotiations and because of the nature of that process, parties tend to hear what they wish to hear. Tactic and strategy underlie the communications between the parties as they attempt to persuade and cajole each other into agreement. But it is well understood that on the conclusion of a collective agreement, the parties’ rights are to be found in the words employed in the agreement and not in the rationale and arguments made during negotiations preceding the document’s execution.” (at pp. 286-287)

The Union argues in effect that extrinsic evidence of the parties’ discussions during collective bargaining reflects their mutual intention that employees would receive a net payment of $400 pursuant to article 22.2(b) of the collective agreement, and that the provision in issue should be interpreted accordingly. Assuming for present purposes, without finding, that article 22.2(b) is latently ambiguous, I turn to consider the evidence of bargaining history relied upon by the Union as an aid to interpretation.

Certain conclusions can be reached from such evidence. First, Mr. Zachar tabled an offer of $400 on February 8, 2000 seeking the Union’s agreement to delete the previous article 22.2. The Union was aware at that time that the Employer was paying $444 per employee pursuant to the former provision. Mr. Coones responded that the sum of $400 would be “a bargain” for the Employer, and Mr. Zachar replied with words to the effect, “$400 — cash in hand, cash in the bank.” Mr. Zachar understood that many Warehouse employees were not wearing the uniform provided by the Employer under the former collective agreement, and any such employees were therefore reaping no benefit from the pre-existing language. There were no discussions at the bargaining table regarding the taxation of the sum offered by the Employer, both proceeding on the assumption that it was not subject to tax.

Mr. Coones was clear in bargaining that employees needed “$400 to spend on clothing,” commenting on the relative buying power of the Employer and individual employees. Further, when Mr. Coones noted on March 6, 2000 that the Employer’s $450 proposal relating to clothing and safety shoes amounted to only $325 for clothing, there was no evidence that anyone responded that employees would receive less than $325.

Mr. Zachar was surprised to learn after the parties’ contract was ratified that the $400 payment to which the parties agreed was indeed subject to taxation, and he anticipated problems in so advising the Union. Mr. Coones subsequently indicated to Mr. Zachar that the parties had intended each eligible employee to receive $400, and there was no evidence before me suggesting that Mr. Zachar took exception to such assertion. Indeed, Mr. Zachar acknowledged in these proceedings that the Union’s understanding in this regard was not unreasonable.

The Union asserts that the evidence before me assists in resolving the alleged ambiguity in article 22.2(b), in so much as it demonstrates the mutual intention of the parties that eligible employees would receive the net sum of $400 pursuant to the said provision. It argues that article 22.2(b) requires that the Employer pay on behalf of each eligible employee a gross sum in excess of $400 which would result in net payments of $400 to affected employees.

Even if one accepts that the extrinsic evidence before me demonstrates the parties’ shared belief that employees would receive $400 pursuant to article 22.2(b), such evidence is also clear that the parties understood that the Employer was only liable for payments of $400. The parties simply did not contemplate that the monies in question would be subject to tax, and therefore understood that the Employer would pay and employees would receive the sum of $400. Indeed, the Union’s characterization of the Employer’s $400 offer as a “bargain” can only be understood accordingly.

The Union in effect seeks payments in excess of $400 on behalf of each employee and urges me to find that the evidence of negotiating history demonstrates that the parties contemplated a net payment of $400 under article 22.2(b). Even if I were to find that the language in issue here is latently ambiguous and that extrinsic evidence is properly considered as an aid to interpretation, I am not convinced that such evidence unequivocally establishes that either party intended the Employer to be liable for payments in excess of $400, and I see no basis for concluding that this was the parties’ shared understanding of the negotiated language.

Accordingly, even if I were to find that the language in issue is latently ambiguous and if I were to therefore consider the extrinsic evidence adduced by the parties, I would not conclude that such evidence clearly establishes the mutual intention of the parties with respect to the issue before me, and does not demonstrate a shared understanding that the Employer would pay sums in excess of $400 pursuant to article 22.2(b), so as to result in net payments of $400 to eligible employees.

Therefore, even if I assume that there is latent ambiguity in the language in issue, I would not consider the extrinsic evidence before me helpful in construing article 22.2 (b). I would therefore be left to determine this grievance on the basis of the contractual language, and for the reasons articulated above, I would dismiss it.

For all of these reasons, the grievance is denied.

DATED AT TORONTO, ONTARIO THIS 3rd day of November 2003.