GSB# 0901/01

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

The Association of Management Adminstrative and Professional Crown Employees of Ontario (Globerman)

Grievor

• and -

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

Employer

BEFORE

Felicity Briggs

Vice-Chair

FOR THE UNION

James McDonald Counsel Sack Goldblatt Mitchell

FOR THE EMPLOYER

Yasmeena Mohamed Senior Counsel Management Board Secretariat

HEARING

April 7, 2003.

DECISION

In October of 1999, Mr. Globerman, a financial consultant with the Ministry of Health, founded “Running To Daylight” after the death of his father. He served as president after its founding and the Employer took the position that holding such office constituted a violation of its conflict of interest policy. Two grievances were filed and an arbitration hearing date was scheduled for February 1, 2002. On that day the parties agreed to mediate and the day was spent negotiating terms and provisions toward a mutually acceptable resolution.

The dispute before me is relatively straightforward: was a settlement reached by the parties? It was the Employer’s position that there was a settlement while the Association took the opposite view. At the hearing the parties agreed to put documents and correspondence before me and call no viva voce evidence. However, there were two facts outside of the documents that the parties agreed to put before me. First, the Employer conceded that the Memorandum of Settlement that was handwritten on February 1, 2002 was not signed because the Employer had concerns about the wording of parts of the document. Second, the Employer was aware at the time that AMAPCEO had a policy that Gary Gannage, President of the Association, had to sign all settlements.

It was common ground that at the end of the day on Friday February 1, 2001, Mr. McDonald had to leave for personal reasons. Prior to his departure he gave a handwritten document entitled Minutes of Settlement (hereinafter referred to as the “Minutes”) between the Employer, AMAPCEO and the grievor. On the following Monday, Mr. McDonald sent a typed version of the same Minutes. His covering letter to Ms. Mohamed stated:

Further to our attendance at the Grievance Settlement Board, and the agreement which was reached that day, attached is a typed copy of the hand written Minutes of Settlement that I presented to you on behalf of AMAPCEO and Mr. Globerman.

I confirm that you advised me that the Government had some questions about some of the wording in these draft Minutes of Settlement. I also confirm our agreement that you and I would discuss these concerns and reword the Minutes of Settlement to satisfy all parties.

I look forward to receipt of either a telephone call from you or a copy of any notes that you might wish me, AMAPCEO and Mr. Globerman to consider in the context of these draft Minutes of Settlement.

I will not have had an opportunity to proof the typed version of the Minutes of Settlement which is enclosed, so I trust that you will take that into consideration in your review.

Attached to the Minutes of Settlement were two appendices. One was a Letter of Resignation and the other was a Letter of Reference. On February 8, 2002, Ms. Mohamed responded in writing to Mr. McDonald. She attached Minutes of Settlement that differed from Mr. McDonald’s document in a number of areas and also had a third appendix which was entitled “Schedule C” – Release. Between February 8, 2001 and March 1, 2002 there were a number of telephone conversations between Mr. McDonald and Ms. Mohamed. On March 1, 2001, Ms. Mohamed sent an electronic communication and attachment to Mr. McDonald’s assistant with a covering email that stated:

Enclosed is the employer’s final draft of the Globerman memorandum of settlement. Please forward same to Mr. McDonald’s attention, for his review. I trust this finalizes the matter.

It did not finalize that matter. Mr. McDonald wrote to Ms. Mohamed on March 7, 2002 with nine paragraphs of suggested changes albeit three of them were either typographical or grammatical in nature. After two weeks Ms. Mohamed responded that she had to seek instructions from her clients. On April 9, 2002, the Employer responded with a revised copy of the Minutes and a covering letter to Mr. McDonald outlining the now five areas of disagreement. At the End of July Ms. Mohamed reminded Mr. McDonald that he still had not responded to her April 9, 2002 letter.

On August 30, 2002 Mr. McDonald wrote to Ms. Mohamed advising that the grievor had retained his own counsel, Mr. Dizgun. He had written to AMAPCEO outlining “requirements for changes to the terms of the proposed settlement”. In his August 30, 2002 letter Mr. McDonald asked Ms. Mohamed if the Employer would agree to the changes or would be prepared to enter into any negotiation/mediation session and if neither option was acceptable the Board would be contacted to proceed with the hearing of the grievances.

In her November 4, 2002 response, Ms. Mohamed informed Mr. McDonald that:

1. The Ministry is not prepared to accept the proposals tendered by Mr. Dizgun, on behalf of Mr. Globerman.

2. The aforementioned proposals speak predominantly to a re-negotiation of settlement funds.

3. The Ministry is of the position that, the monetary settlement funds have been fully agreed upon by the parties, at the mediation session held on February 1, 2002. The Ministry remains of the position that, at the close of the mediation session held on February 1, 2002, all the parties, including Vice Chair Kaplan, were of the full understanding that an agreement had been reached between the parties, and the only reason the settlement agreement was not signed on February 1, 2002, was because of your request for an early departure on the aforementioned day. Hence at the close of the mediation, the only outstanding issue between the parties remained the conveyance of the settlement terms into writing for execution by all parties.

4. The Ministry’s position is that subsequent discussions between the parties related predominantly to issues of confidentiality, form and phraseology of certain terms. As of February 1, 2002, the settlement was finalized.

5. Accordingly, the Ministry is fully prepared to mediate and pursue further settlement discussions on the confidentiality issues, as highlighted under cover of my letter dated April 9, 2002.

EMPLOYER SUBMISSION

Ms. Mohamed reviewed the Minutes of Settlement that were handwritten on February 1, 2001 by Mr. McDonald. She set out those provisions that were, in the Employer’s view, important and those that were not substantive. The main area not finalized was “the breadth and scope” of paragraph 15 that considered the confidentiality provisions. It was suggested that the failure to agree upon that provision is not sufficient to render a finding that there was no agreement between the parties.

The fact that the Minutes were never signed is not significant for the purposes of my determination, the Employer asserted. Although it is to be noted that the Letter of Reference that was appended to those handwritten Minutes was, in fact, signed by the grievor’s supervisor. In any event, there can be no doubt that there was a deal between the parties. Indeed, the February 4, 2002, letter from Mr. McDonald referred to the “agreement that was reached”. The parties agreed that the final Minutes should be typed and Mr. McDonald provided that formalized document. A review of the correspondence indicates no substantive dispute. The parties were merely discussing terminology. Any outstanding differences did not relate to the essential components of the deal. That is to say that further discussions did not relate to compensation, resignation or LTIP entitlement. The continuing attempts to reword or clarify the document were regarding the confidentiality arrangements and certain obligations. Nothing that remained went to the commitments agreed upon by the parties on February 1, 2002. Although the discussions were taking place over a protracted period of time there was no indication from either side that the fundamentals of the deal were problematic. However, matters changed completely with Mr. McDonald’s letter of August 30, 2002. At that point the Association and the grievor resiled from the fundamental areas of the agreement as evidenced by a new proposal regarding compensation and pension.

The Employer submitted that the principle of the sanctity of settlements is now trite. In this regard the Employer relied upon Re The Crown in Right of Ontario (Ministry of Health and Long-Term Care) and OPSEU (Dale et al) (March 11, 2002), unreported (Abramsky) GSB#0783/00; Re The Crown in Right of Ontario (Ministry of Environment) and OPSEU (Skates et al) (May 21, 1992), unreported (Barrett) GSB#1177/91; and Re Ontario Racing Commission and Association of Management, Administrative and Professional Crown Employees of Ontario (December 13, 2001), 2001 CanLII 61974 (ON LA), 104 L.A.C. (4th) 166 (Knopf).

In conclusion the Employer asked that I order the Minutes of Settlement from February 1, 2002 in effect.

ASSOCIATION SUBMISSIONS

Mr. McDonald, for the Union, suggested that there were a number of reasons why I should find that the parties did not reach a settlement. The first was that no document was signed by anyone at any time. This is a three cornered agreement between the Employer, the Association and the grievor and there was no signature appended by any representative to any settlement document. A signature is not a mere matter of form. It is proof of a commitment to be bound to an agreement regardless of what occurs later. The absence of signatures should be compelling.

Second, there is no document that was signed by Mr. Gannage, President of the Association or a duly appointed designate. The Employer knew that Mr. Gannage’s signature was not just a formality but a necessity for an agreement.

The third reason there can be no finding of an agreement is the significant number of issues raised by the Employer after February 1, 2002 that had yet to be resolved. The Employer made clear that there were additions and deletions that were required before the matter was resolved. The number of document exchanges makes this clear. The Union does not dispute that some of the major issues were agreed upon such as the compensation and the fact of the grievor’s resignation but the evidence is clear that there were a number of unresolved issues. Notwithstanding the Employer’s assertions in its submissions, there is no evidence before this Board that established which issues were of major or minor importance to either party and I am not at liberty to determine or assign value to those issues as would an Interest Board of Arbitration. The fact that the Employer perceives an issue as unimportant does not magically make it so. It is evident in the Employer’s very first response to the handwritten Minutes that it wanted a different resolution of some of the issues. Its responding document contained different terms regarding what the grievor could say about his termination, which could be told of the full details of the agreement, the timing of the payment of compensation or the extent of a restriction regarding the grievor’s future endeavors. These were not insignificant matters and clearly were not agreed upon by the parties. Therefore, it cannot be said that there was a deal.

The fourth reason I have to find there was no deal is because as seen from the document exchange the parties continued to negotiate the terms of the agreement. At no point prior to August 30, 2002 did the Employer tell the Union, “we had a deal on February 1, 2002, sign it”. Indeed the Employer agreed to mediate at least some aspects of the outstanding issues.

Fifth, the grievor did not recognize there was an agreement between the parties. This is apparent by his retaining his own counsel and developing counter proposals. While it is true that the grievor sought further compensation he also raised issues about non-monetary matters.

Finally, the Association asks what version of the settlement would I order enforced. The Employer cleverly suggested that I order the handwritten Minutes from February 1, 2002. However, there is substantial evidence making clear that document was not acceptable to the Employer. It is now too late for the Employer to take that offer.

Mr. McDonald suggested that a thorough reading of the Re Racing Commission reveals that if I apply the same principles and questions as Vice Chair Knopf to the matter at hand, I must find for the Association.

In reply, Ms. Mohamed took issue with the Association’s categorization of the handwritten Minutes as a “proposal”. It was a deal and the lack of signatures is not determinative. Further, while there were unresolved language issues there was nothing outstanding between the parties of substance and so I must find there was a settlement. The Employer was merely seeking clarification or rewording of certain terms and that activity should not be construed as evidence of no agreement between the parties. Finally, the amount of time that was taken should not be seen as proof that the Employer was “negotiating”.

DECISION

After consideration, I cannot find for the Employer. While I agree the lack of signatures, in and of itself is not determinative, there are many factors which lead me to find that there was never sufficient meeting of the minds to bring about a finding of a settlement in these circumstances. The Employer asserted that there was a deal as of February 1, 2001 and all that remained was the finalization of the “breadth and scope” of the confidentiality provision. It was further suggested that the parties were merely dealing with the “the phraseology of certain terms”. I think not. A review of the correspondence reveals that the parties were negotiating various substantive terms not just dealing with matters of form. I agree that the quantum of compensation and the fact that the grievor would resign were apparently no longer in dispute as of the end of the February 1, 2001 mediation session. However, even the addition of an agreement on the letter of reference does not transform the negotiations into a settlement.

A review of Re Ontario Racing Commission (supra) is useful. The issue in that case was whether there was a binding settlement between the parties and whether the Employer acted properly by invoking the doctrine of repudiation. After the mediation session, there were Minutes of Settlement signed by the duly appointed Employer representative. Counsel for the Association told the Employer that Gary Gannage, the Association’s president, had been communicated with and had given instructions to agree to the terms of the arrangement. The meeting concluded with the understanding that the minutes would be signed by Mr. Gannage and returned quickly to the Employer. Less and an hour later the Association’s representative notified the Employer representative that Mr. Gannage was concerned about certain aspects of the deal and wanted changes in two specific areas. The Association categorized its concerns as an “oversight” in the language. The Employer agreed to one of the desired changes but would not concede the second, asserting that the alteration sought was more than a matter of clarification. Accordingly the Employer issued a new typed version of the Memorandum of Settlement with one of the two changes made. The Association continued to attempt to negotiate its outstanding issue.

In her decision, Arbitrator Knopf considered the “delicate art to negotiating settlements”. During this tentative process each party has to assess its case on an ongoing basis. Such an examination would include its likelihood of success in litigation, the costs both human and monetary of proceeding, the amount of time required for the process to unfold and whether something less than its formal position would be sufficient to resolve the matter. At the same time each party has to devise a strategy toward an acceptable resolution taking into account a variety of factors including the timing of proposals and how best to structure and deliver various positions to the other side. As Ms. Knopf observed, each set of negotiations will be different and the dynamic can be altered by the smallest change in almost any factor. Ascertaining when negotiations are close to or at a conclusion is often a difficult exercise. All of these various considerations ensure that negotiations either before or during the mediation process or before can be hugely difficult to navigate and often impossible to foresee. It is for these reasons that problems can arise like in the instant matter.

Arbitrator Knopf found that the case before her “boiled down” to three fundamental questions, the first of which was whether there was a settlement reached during the course of mediation. She stated, at page 179:

This is the easiest question to answer. There can be no doubt that a settlement was reached. Everyone involved in those discussions left their meeting on September 10th under the impression that a deal had been achieved. Both parties’ representatives had consulted their principles throughout the day and had received authorization to enter into the specifics of the deal. Both teams of negotiators indicated that they had authority to bind their principals to specific terms. A mutually acceptable draft was created and this was signed by the Employer. The Association’s counsel indicated that the convention demanded that the Association’s president sign the same document. Counsel for the Association undertook that the document would be taken to the president for signature and that it would be returned immediately. Any question of when Mr. Gannage signed the document was laid to rest with Mr. Campbell’s acceptance of Mr. Gannage’s word that he also signed it on the 10th. So while nothing ultimately turns on when the Association actually did sign the original settlement, the uncontradicted evidence is that the Association did sign the settlement on September 10th even though it was not sent back to the Employer until many days later.

Therefore it must be concluded that everything necessary to create a settlement occurred on September 10th. There was a meeting of minds by those authorized to bind their principals, a confirmation of those terms in writing and an agreement to formalize the terms in a typewritten document within days. Therefore, there certainly was a settlement achieved on September 10th as evidenced by Exhibit #1.

It seems to me that the facts of this case are very different from those before Ms. Knopf in almost every respect. The first difference is that even though the mediation day ended with the Association leaving draft Minutes of Settlement, the Employer had articulated that it had concerns about the wording in the draft. Neither party had signed the document and it was understood that counsel would discuss the concerns in the following days and “reword the Minutes of Settlement to satisfy all parties”. Unfortunately the discussion that followed did not resolve those concerns.

In the instant matter, as in Re Ontario Racing Commission, the Employer knew of the Association’s policy regarding the necessity of Mr. Gannage’s signature on the settlement document. Ms. Knopf had evidence that there was a discussion between the Association’s counsel and Mr. Gannage wherein permission was given to approve the deal and an indication was communicated that the Minutes of Settlement would be signed upon receipt. There were no similar facts before me. The Employer knew of the Association’s policy but at no point was it informed that the Minutes were approved by or, about to be signed by, Mr. Gannage.

As stated earlier, the facts before Ms. Knopf revealed that “mutually acceptable” Minutes of Settlement were drafted and even signed by the Employer. Here, unsigned minutes drafted by the Association’s counsel (not yet approved by Mr. Gannage) were provided to the Employer at the end of the day that the Employer was not prepared to sign because of “phraseology” concerns.

Things proceeded very quickly in the facts before Ms. Knopf. In the instant matter the parties continued to negotiate the terms of a number of various paragraphs of the Minutes of Settlement over a protracted period of time. A month after the mediation Mr. McDonald sent a letter to Ms. Mohamed that indicated the grievor still had “the following concerns” regarding nine aspects of the Memorandum. On April 9, 2002, some two months after the mediation session the parties had still not agreed on various terms of the settlement including the timing of the payment of compensation, confidentiality and disclosure of certain aspects of the deal, the grievor’s further involvement with the Foundation until his resignation becomes effective and the final wording of the Letter of Reference. It seems to me that these disputes are concerning matters of substance and not just a discussion of “terminology”.

The Employer suggested that I should find there was a deal in part because there was no indication during their correspondence that the fundamentals of the deal were problematic. Again, it is difficult for me to determine that the above mentioned outstanding issues were not “fundamental” aspects of the deal. The Employer argued that the sanctity of settlements is now trite. I agree. However, I cannot find that the parties ever had a settlement in this matter. The Employer’s request for an enforcement order underscores the problem with such a finding. The Employer asked that I order the February 1, 2001 draft handwritten Minutes of Settlement into effect. However, that is the very document that the Employer told the Association it had concerns and questions about. Further, it is the very document that the parties continued to negotiate changes to for months. I cannot find that the parties agreed to those draft Minutes of Settlement.

I make no comment on the wisdom of amending one’s position by demanding an increase in what is required to achieve a settlement particularly on issues that were considered to no longer be in dispute. I merely observe that this type of conduct is occasionally the unfortunate bi-product of protracted or frustrating negotiations.

For all of these reasons I find that there was no settlement reached between the parties on February 1, 2001 or later regarding the two grievances filed by Mr. Globerman. As requested by the parties I remain seized in the event of difficulties implementing this decision including any issue of liability as the result of the grievor’s return to work.

Dated in Toronto this 7th of May, 2003.