GSB# 2001-1700, 2002-1235, 2002-1740, 2002-1745, 2002-2397
UNION# 02B146, 02B779, 02B781, 02B780, 2002-0323-0016, 2002-0323-0017, 2002-0101-0025, 2000-0101-0007, 2000-0101-0009, 2000-0101-0008
IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
BETWEEN
Ontario Public Service Employees Union (Ashley et al.)
Grievor
- and -
The Crown in Right of Ontario (Ministry of Community, Family and Children’s Services)
Employer
BEFORE
Randi H. Abramsky
Vice-Chair
FOR THE UNION
Tim Hannigan Ryder Wright Blair & Doyle Barristers and Solicitors
FOR THE EMPLOYER
David Strang Acting Associate Director Management Board Secretariat
HEARING
October 8, 2003.
AWARD
The individual and group grievances in this matter allege that the Employer failed to inform employees about their opportunity to “buy-back” service for which no pension contributions had been made during the 1989-1991 “buy-back” window, or the window applicable to the period sought to be purchased. They further allege that the Employer provided incorrect information to employees. In addition, it is alleged that one employee’s application to buy back service was mishandled. The Employer has moved to dismiss all of the grievances on the basis that Board is without jurisdiction to decide what, in its submission, is a pension matter not governed by the collective agreement. All other preliminary issues that could be raised were reserved by counsel.
Facts
The statutory framework for pensions for employees in the Ontario public service started in 1920 under the Public Service Act. In 1959, a separate statute was enacted, the Public Service Superannuation Act, with employee pensions administered by the Crown, through a Board. The next change took place in 1989 with the passage of the Public Service Pension Act, R.S.O. 1990, c.P.48, effective January 1, 1990.
The Public Service Pension Act moved control of the public service pension plan (for both OPSEU members and non-OPSEU employees) out of the control of the Crown to a Board of Trustees. There was also a change to full-funding of the plan and a change in the buy-back provisions, under which an employee could “buy-back” pension credits and make contributions for periods of service for which no pension contributions had been made. Previously, employees could buy back pension credits at any time. Under the new statute, there was a two-year limit. The period of December1989 to December 1991 was designated as the “buy back window” under the new legislation. A number of the grievances allege that employees were not informed about the possibility of their buying back their service during this period of time, or were given incorrect information about the cost of their buy-back, the methods of paying for the buy-back or the benefit of doing so.
The Public Service Pension Act also allowed the creation of a separate pension plan for a class or classes of persons who were members of the Public Service Pension Plan. Under this provision, the government of Ontario and OPSEU agreed to establish a separate pension plan for OPSEU members, to be funded, in part, by a transfer of assets from the Public Service Pension Fund. To accomplish this, Ontario and OPSEU entered into a Sponsorship Agreement on April 18, 1994 to establish the OPSEU Pension Plan, effective January 1, 1993. Enabling legislation, the OSPEU Pension Act, 1994, then created the OPSEU Pension Trust to jointly administer the OPSEU Pension Plan. The Sponsorship Agreement provided an enforcement section, Section 65, which states: “Any dispute with respect to the interpretation or application of this agreement or the terms of any other agreement or document that the Sponsors must execute pursuant to this agreement, may be referred by either Sponsor to final and binding arbitration.”
Both parties recognized that the precise amount to be transferred depended on the parties having accurate data relating to plan members. They were also aware, at the time of the Sponsorship Agreement, that some of the data relating to plan members was inaccurate. Accordingly, the parties agreed that the government of Ontario would undertake a data purification project to correct inaccuracies in plan member data, and agreed that the initial asset transfer would be subject to a purification adjustment following completion of the project which began in 1994.
On July 28, 2000, OPSEU invoked Section 65 of the Sponsorship Agreement to refer certain matters in dispute to binding arbitration. On April 21, 2001, the parties settled their dispute. The settlement, among other things, set out principles in relation to members who had over-contributed to the plan and who had under-contributed, and for the adjustment of service credits as disclosed by the data purification project. The settlement also provided for the arbitration of factual disputes as follows:
- Members who are affected by the Project may refer any dispute arising to expedited arbitration, on such terms as are agreed by the Parties or determined by the Arbitration Board consisting of George Adams, QC, Chris Dassios and John Solursh.
OPSEU agreed “to withdraw all grievances arising from the Project, subject to its right, under paragraph 12 of these Minutes of Settlement, to expedited arbitration for factual disputes arising from the Project.” The same board of arbitration remained “seized of this dispute, and all matters arising from the interpretation or implementation of these Minutes of Settlement.”
The OPSEU Pension Trust maintains a number of standing committees, including an Adjudication Panel. According to the 2002 Annual Report of the OPSEU Pension Trust, the Adjudication Panel “gives plan members and pensioners access to an impartial review process in the event of disputes concerning OPTrust’s decisions on eligibility, benefit entitlements or other pension-related rights under the OPSEU Pension Plan.”
Until 1993, the Crown Employees Collective Bargaining Act, R.S.O. 1990, C.50, section 18(1)(b) made “superannuation” an exclusive function of the employer to manage and provided that “such matters will not be the subject of collective bargaining nor come within the jurisdiction of a board.” In 1993, CECBA was amended and pensions became a subject of collective bargaining. The Sponsorship Agreement, signed on April 18, 1994, provides, with some exceptions, that the sponsors (the government of Ontario and OPSEU) “may collectively bargain with respect to the Plan and may amend this agreement, the Trust Agreement, the Plan or any Plan documents….”
The current collective agreement (January 1, 2002 to December 31, 2004) contains a number of provisions related to pensions. Appendix 20, dated September 13, 2002, outlines four “understandings regarding pension matters”, including the following:
- It is understood that, while pension issues are bargainable, the Sponsorship Agreement, the Pension Plan, the Trust Agreement and any other ancillary documents concerning the Pension Plan do not form part of the Collective Agreement.
Other references to the pension plan which appear in both the prior and current collective agreement include:
Appendix 11 is a letter signed by Kevin Wilson on behalf of the Employer which provides that during the term of the collective agreement, “it is not the intention of the Employer to amend the OPSEU Pension Plan or any related documents. Where the Employer wishes to do so, it will negotiate any changes with the Union.”
Appendix 17 extends Factor 80 to December 31, 2004 for employees who are declared surplus prior to that date. It requires the Plan sponsors to amend the OPSEU Pension plan accordingly.
Appendix 18, which involves transfer agreements between the employer and a receiving employer, requires OPSEU and the Crown to amend the OPSEU Pension Plan to provide for continued membership in the Plan of former public servants for employment with an employer who is not the Crown or a Crown agency in certain circumstances.
Appendix 9, paragraphs 2(a), (b), 3 and 4 deal with pension issues for employees who have been declared surplus due to restructuring.
Positions of the Parties
A. Employer
The Employer submits that the Board has no jurisdiction over the instant grievances. In its view, all of the grievances appear to be making claims that relate to their failure to take advantage of a buy-back opportunity ending in 1991. Since that was a time when pensions were not the subject of collective bargaining and were not included in the collective agreement, the Employer contends that the grievors’ claims do not arise out of or in connection with the collective agreement and are not within the Board’s jurisdiction. Even after 1993, when pensions became a subject of collective bargaining, pensions were not included as part of the collective agreement. The Employer therefore submits that issues regarding pension credits are outside the collective agreement and outside the jurisdiction of the Board.
Instead, the Employer contends that the parties have provided alternative enforcement mechanisms – in the Sponsorship Agreement, in the Settlement Agreement and within the OPSEU Pension Trust. The Employer submits that those forums are to be utilized, not the Grievance Settlement Board. It asserts that a specialized expertise is required to determine pension issues and that the parties’ have tailored their dispute-resolution processes accordingly. It submits that the processes developed by the parties for the resolution of pension disputes should be respected.
In the Employer’s view, Appendix 20 restated the parties’ mutual understanding that the OPSEU Pension Plan was not part of the collective agreement. It was added due to dicta in OPSEU, Local 439 and Ottawa Health Care Group [2001] O.J. No. 446 (Ont. Div. Ct.), in which Justice Cosgrove stated that the OPSEU Pension Trust is “incorporated and closely integrated with the collective agreement.”
In support of its motion to dismiss, the Employer cites to the following cases: OPSEU (Brummel) and Ministry of Health (1992), GSB No. 1584/91 (Kirkwood); OPSEU (Ball) and Ministry of Municipal Affairs and Housing (1999), GSB No. 2444/94 (Dissanayake); London Life Insurance Company v. Dubreuil Brothers Employees Assoociation, a Division of IWA Canada, Local 2693 et al. 2000 CanLII 5757 (ON CA), [2000] 49 O.R. (3d) 766 (Ont. Ct. App.); Re Dawn Foods Canada and Grain Services Union and UFCW, Local 343 P-2 (2002), 2002 CanLII 78967 (CA LA), 108 L.A.C. (4th) 51 (Hood).
B. Union
The Union first submits that all of the grievances pre-date Appendix 20. It therefore contends that what is at issue is the status of pension issues prior to Appendix 20. Although it agrees that the Divisional Court raised the issue of whether the OPSEU Pension Plan was incorporated into the collective agreement on its own, it contends that it is still a decision of the Court that the OPSEU Pension Plan is incorporated into the collective agreement. Therefore, it argues that prior to the adoption of Appendix 20 on September 13, 2002 – disputes concerning pension matters are subject to binding arbitration before the Grievance Settlement Board.
In the Union’s view, the fact that CECBA, until 1993, made “superannuation” an exclusive management right does not control the matter. Citing OPSEU (Bousquet) and Ministry of Natural Resources (1991), GSB No. 541/90 et al. (Gorsky), the Union argued that management’s actions are still subject to review for good faith and reasonableness. It asserts that since wages (including benefits and pension) are part of the bargain for providing services to the Employer, there is a link with the collective agreement which requires the Employer to act reasonably and in good faith.
In this case, the Union argues that the Employer acted unreasonably in giving employees information without ensuring its accuracy, or failing to give information. It asserts that the Employer’s conduct amounts to a negligent misrepresentation, citing Imperial Tobacco Canada Ltd. and Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, Local 323T (Mcllwraith Grievance) [2001] O.L.A.A. No. 725 (Carter) and Spinks v. Canada (C.A.)1996 CanLII 4041 (FCA), [1996] 2 F.C. 563 (Fed. Ct. App.) In its submission, negligent misrepresentation establishes that the Employer failed to act in good faith as required in OPSEU (Bousquet), supra.
Citing Weber v. Ontario Hydro 1995 CanLII 108 (SCC), [1995] 2 S.C.R. 929 (S.C.C.), the Union argues that a board of arbitration has exclusive jurisdiction where the dispute expressly or inferentially arises out of the collective agreement. In this case, the Union submits, by virtue of the Divisional Court’s decision in OPSEU, Local 439 v. Royal Ottawa Health Care Group, supra, the matter expressly arises out of the collective agreement.
C. Employer Reply
The Employer asserts that the Divisional Court’s decision in OPSEU, Local 439 and Royal Ottawa Health Care Group, supra, is distinguishable because that matter involved an interpretation of Appendix 9 and 18 and therefore did arise out of the collective agreement. It contrasts the instant dispute about pension credits under the OPSEU Pension Trust which is a matter of pension law.
The Employer submits that the grievances here are an attempt to get around the prior settlement (with its internal dispute process) as well as the dispute resolution processes of the OPSEU Pension Trust. It suggests that if employees can grieve such matters to the GSB, which will then impact the integrity of the pension plan, it would significantly imperil the financial integrity of the plan. Again, it submits that the intent of the parties was never to include pension disputes under the jurisdiciton of the GSB and Appendix 20 simply reaffirms that principle.
Decision
Under the Crown Employees’ Collective Bargaining Act, to be arbitrable before this Board, a dispute between the parties must be a difference between them “rising from the interpretation, application, administration or alleged contravention of the [collective] agreement.” The same language appears in Section 45(1) of the Ontario Labour Relations Act, which was considered in Weber v. Ontario Hydro, supra.
In OPSEU (Ball) and Ministry of Municipal Affairs and Housing, supra, the grievor claimed that the Ministry misled him into taking early retirement by failing to advise him that the Ontario Pension Board’s Adjudication Committee had made a decision to remove the maximum service credit cap of 35 years. The grievor, who was 53 at the time of his retirement and had more than 35 years of service, testified that “[h]ad he been aware that the cap had been removed, he would have worked at least till he was 60 years old and assessed the situation at the time.”
The Union in that case conceded that it was not claiming that the employer had violated any particular provision of the collective agreement, but argued that the “Board should infer from the collective agreement that the employer owed a duty of care to provide information regarding pension entitlement.” (p. 8) It asserted that the employer had committed a tort – specifically negligence – and that the Board’s jurisdiction flowed from the fact that the collective agreement provides for employment benefits, even though it makes no reference to pensions.
Vice-Chair Dissanyake disagreed. He concluded, at p. 11:
There is no …provision in the collective agreement between these parties, which make benefits under the Ontario Public Service Pension Plan part of it. On the contrary, the benefits and the pension plan are governed by specific legislation, the Public Service Pension Act and regulations thereunder.
The only assertion the union made was that the collective agreement deals with “employment benefits”. This in the Board’s view does not bring the present dispute within the purview of the collective agreement. The collective agreement deals with specific employment benefits. Pensions are not one of the benefits dealt with. There is nothing in this collective agreement … which makes the Pension Plan or the benefits thereunder part of it or related to it.
Accordingly, the Board found that the “grievance is not arbitrable” and dismissed the grievance.
In the instant matter, the Union also does not assert that the Employer violated a specific provision in the collective agreement. Instead, it relies on the decision of the Divisional Court in OPSEU, Local 439 and Royal Ottawa Health Care Group, supra, to assert that the Ontario Pension Trust is, contrary to the conclusion reached in the Ball case, incorporated into the collective agreement.
Although there is certainly language in the oral decision of Justice Cosgrove to that effect, the decision of Justice O’Leary appears to be more limited. He concluded, at paragraphs 28-29, “that the complaints against the Crown in this application arise out of the collective agreement. So far as the complaint based on Appendix 9 and Appendix 18 of the collective agreement is concerned, such must be dealt with by the arbitration process contained in the collective agreement.” That conclusion is fully consistent with the Board’s jurisprudence. The broader pronouncement of Justice Cosgrove that “the O.P.T. is incorporated and closely integrated with the collective agreement…” is, in my view, dicta. Consequently, I do not conclude that the decision in OPSEU, Local 439 and Royal Ottawa Health Care Group, supra, requires a conclusion that all pension matters are incorporated into the collective agreement.
Further, the provisions of the collective agreement which mention pension benefits (Appendices 9, 11, 17 and 18) do not incorporate the pension plan, in its entirety, into the collective agreement. In London Life Insurance Company v. Dubreuil Brothers Employees Association, a Division of IWA Canada Local 2693 et al., supra, the Ontario Court of Appeal endorsed the traditional method used by arbitrators of deciding the arbitrability of benefit entitlement claims. That method involves determining into which of four categories the language of the particular collective agreement falls. The four categories, as first identified in Brown and Beatty, Canadian Labour Arbitration, 3rd Ed. (1988) are as follows:
(1) where the collective agreement does not set out the benefit sought to be enforced, the claim is inarbitrable.
(2) where the collective agreement stipulates that the employer is obliged to provide certain medical or sick-pay benefits, but does not incorporate the plan into the agreement or make specific reference to it, the claim is arbitrable.
(3) where the collective agreement only obliges the employer to pay the premiums associated with an insurance plan, the claim is inarbitrable; and
(4) where the insurance policy is incorporated into the collective agreement, the claim is arbitrable.
In my view, with certain limited exceptions, the collective agreement in this case falls under category 1 - the collective agreement does not set out the benefit sought to be enforced. Nor does it fall under category 4.
Appendix 20 reconfirms the conclusion reached by the Board in Bell, supra, that pension benefits and the pension plan are governed by specific legislation and do not fall within the purview of the collective agreement. In Appendix 20, the parties unequivocally state that “while pension issues are bargainable, the Sponsorship Agreement, the Pension Plan, the Trust Agreement, and any other ancillary documents concerning the Pension Plan do not form part of the Collective Agreement.” The clear purpose of this provision was to avoid the dicta contained in OPSEU, Local 439 and Royal Ottawa Health Care Group.
Counsel for the Union argued that all of the grievances pre-date the inclusion of Appendix 20. Given the conclusion of the Board in Bell, supra, as well as in a January 1993 decision of the Board in OPSEU (Brummell) and Ministry of Health, supra, that fact is not material. In Brummell, the Board dismissed a grievance by an employee which alleged that he accepted a position in the public service based on representations by the Employer that he could transfer his pension credits from Canadian National Railway to the Ontario public service pension. In fact, the transfer could not be done without the grievor paying $58,000. The Board dismissed the grievance at p. 18 because “the claim that the Union makes is not based upon any violation of the collective agreement but is rather an attempt to enforce a representation that falls outside of the collective agreement and falls within the exclusive rights of the Employer.” Consequently, Appendix 20 does not represent a change in the status of pension matters before the GSB, but a re-confirmation of the conclusions reached earlier by the Board.
As noted above, for a dispute to be arbitrable before this Board, it must involve a difference between the parties “arising from the interpretation, application, administration or alleged contravention of the [collective] agreement.” Under the analysis set forth in Weber v. Ontario Hydro, supra, an arbitrator has exclusive jurisdiction when the dispute, in its essential character, arises from the interpretation, application, administration or violation of the collective agreement.
As cited in London Life Insurance Company, supra at para. 21, the Supreme Court of Canada elaborated on the Weber approach to determining arbitrability in Regina Polic Assn. Inc. v. Regina (City) Board of Police Commissioners, 2000 SCC 13, 183 D.L.R. (4th) 14, at para. 25:
To determine whether a dispute arises out of the collective agreement, we must therefore consider two elements: the nature of the dispute and the ambit of the collective agreement. In considering the nature of the dispute, the goal is to determine its essential character. This determination must proceed on the basis of the facts surrounding the dispute between the parties, and not on the basis of how the legal issues may be framed: see Weber, supra, at para.43. Simply, the decision-maker must determine whether, having examined the factual context of the dispute, its essential character concerns a subject-matter that is covered by the collective agreement. Upon determining the essential character of the dispute, the decision-maker must examine the provisions of the collective agreement to determine whether it contemplates such factual situations. It is clear that the collective agreement need not provide for the subject-matter of the dispute explicitly. If the essential character of the dispute arises either explicitly, or implicitly, from the interpretation, application, administration or violation of the collective agreement, the dispute is within the sole jurisdiction of an arbitrator to decide.
In this case, the “essential character” of the dispute involves the employees’ right to make informed decisions concerning the “buy-back” of pension credits which existed from 1989 to 1991. The employees’ rights concerning that “buy-back” option are governed by the Public Service Pension Act, and, through the data purification project, the Sponsorship Agreement and the 2001 Settlement Agreement. They are not governed by the collective agreement. The Employer is governed by the Act and is a party to the Sponsorship Agreement and the Settlement Agreement. There is an independent dispute resolution process contained in those agreements. Because pension benefits and the pension plan, including the “buy back” of pension credits, do not involve matters arising under the collective agreement, the Board has no jurisdiction over such matters. As set forth in Weber v. Ontario Hydro, supra, at para.52: “The fact that the parties are employer and employee may not be determinative. Similarly, the place of the conduct giving rise to the dispute may not be conclusive; matters arising from the collective agreement may occur off the workplace and conversely, not everything that happens on the workplace may arise from the collective agreement…”
The decision in OPSEU (Bousquet), supra, does not assist the Union. The Board in that case did not adopt a general duty of good faith and reasonableness in the exercise of management rights. At issue was management’s denial of a training and development opportunity to an employee, allegedly because he was a francophone. The Employer argued that since training and development was a function reserved to management under Section 18(1) of CECBA, the Board had no jurisdiction to hear the grievance. The Board determined, at p. 67, that “the Grievor has no statutory right to grieve because he has been denied a training and development opportunity. … Here, the right to raise the subjects of training and development by way of a grievance has been restricted by means of a clear indication on the part of the Legislature.”
Nevertheless, the Board also concluded that the employer did not have “carte blanche to do what it wishes under the purported exercise of an exclusive management function with respect to training and development.” (p. 58). Instead, the Board had the right to review the employer’s exercise of its discretion for good faith and reasonableness because developmental opportunities impacted an employee’s ability to compete in job competitions under then Article 4 of the collective agreement. The Board held at p. 35: “[T]he significant fact required to place a limitation on the unfettered exercise of a management right is the existence of a provision in the collective agreement which would either be negated or unduly limited by a particular application of such right.” Consequently, under Bousquet, supra, the jurisdiction of the Board to review the Employer’s exercise of a right reserved to management is derivative – it depends on the existence of a provision in the collective agreement which might be adversely affected by management’s action.
Applying that holding to the facts of this case, the Board’s jurisdiction cannot be based solely on the Board’s exercise of its discretion in regard to “superannuation.” There must be some provision in the collective agreement which could be either negated or limited by the Employer’s actions in regard to “superannuation.” For the reasons set forth above, there is no collective agreement provision which deals with the “buy-back” issue or which incorporates, generally, the pension plan. Accordingly, there is no basis for the Board to assert jurisdiction over the Employer’s alleged conduct in regard to what it said (or did not say) or did regarding the buy-back options of employees under the Bousquet decision.
Nor is the decision in Imperial Tobacco Canada Ltd. v. Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, Local 323T (McIllwraith Grievance), supra, of assistance. The decision in Imperial Tobacco Canada Ltd., supra, appears to have imposed a duty of care that qualifies management’s discretion to manage its business under the parties’ management rights clause. Based on an established practice of formally advising employees of their pension rights during the period that employees are eligible to join the plan, the arbitrator ruled that management had a duty to make sure that the grievor was aware of his rights to join the plan when he first became eligible.
This decision, in my view, is not consistent with either OPSEU (Bell), supra, or OPSEU (Bousquet), supra. In Bell, the Board specifically rejected the Union’s contention that the Employer had an independent duty of care to provide information regarding pension entitlement. In Bousquet, supra, the Board determined that there is no general requirement of good faith and reasonableness in the exercise of rights reserved to management, unless it impacts a right contained in the collective agreement. As a Vice-Chair of a single board, I am required to follow these GSB decisions, absent compelling circumstances. Amalgamated Transit Union (Blake) and Toronto Area Transit Operating Authority, GSB No. 1276/87 (Shime).
Accordingly, for all of the reasons set forth above, I conclude that the “essential character” of the matters in dispute does not arise out of the collective agreement. This decision is not meant to minimize the significance of the underlying issues to the grievors. The issues raised are clearly of great significance to the individuals involved – as they are to the Employer and the OPSEU Pension Trust. Unfortunately, because the issues do not arise under the collective agreement, they are not matters which this Board may address. Accordingly, I conclude that the grievances are not arbitrable and must be dismissed.
Issued at Toronto this 5th day of November, 2003.