GSB# 2003-0337

UNION# 2003-0720-0004

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Ontario Public Service Employees Union

(Union Grievance)

Grievor

• and -

The Crown in Right of Ontario

(Ministry of Health and Long-Term Care)

Employer

BEFORE

Ken Petryshen

Vice-Chair

FOR THE UNION

David Wright

Ryder Wright Blair & Doyle

Barristers and Solicitors

FOR THE EMPLOYER

John Smith

Senior Counsel

Management Board Secretariat

HEARING

June 11, 2003.

Decision

In a grievance dated May 1, 2003, the Union claims that “the revised schedules to the transfer agreement between the Crown and St. Joseph’s Care Group does not comply with the Collective Agreement including Appendix 18”. The grievance concerns the transfer of the Lakehead Psychiatric Hospital (“LPH”) to the St. Joseph’s Care Group (“St. Joseph’s”). This decision addresses only the Employer’s preliminary objection that the grievance is untimely and therefore should be dismissed. Counsel made their submissions on the basis of exhibits entered on consent and an agreed factual context. St. Joseph’s, the receiving hospital, appeared at the hearing with counsel as an observer and reserved the right to argue the issue of standing should the grievance proceed to a hearing on its merits. There was no challenge to my jurisdiction to hear and determine the Employer’s preliminary objection.

The obligations of the Employer when it transfers bargaining unit functions or jobs to the private or broader public sectors are set out in Appendix 9 and, more particularly, in Appendix 18 of the Collective Agreement. All rights and obligations contained in paragraph 1, the reasonable efforts provision, and paragraphs 4 and 5 of Appendix 9 are governed by the provisions in Appendix 18. The Employer’s obligation is to make reasonable efforts to obtain job offers for affected employees from the new employer with terms and conditions of employment which are as close as possible to the then existing terms and conditions of employment of the employees in the Ontario Public Service (“OPS”) bargaining unit.

Appendix 18 makes reference to four types of transfers, one of them being a negotiated transfer. The transfer of the LPH to St. Joseph’s is a negotiated transfer which is subject to Article 6.0 of Appendix 18. For our purposes it is necessary to refer only to Sections 6.1.1 and 6.2.1 of Article 6.

6.0 Schedule B Transfers – Negotiated Transfer

6.1.1 For all Schedule B transfers, excluding those covered by Article 6.3, the

employer will propose in negotiations with the receiving employer that

job offers shall be at a salary of at least 100% of the respective employee’s

weekly salary at the time of the transfer and recognize the service and

seniority in the Ontario Public Service (OPS) of each employee for the

purpose of qualification for vacation, benefits (except pension), layoff and

job competition, severance and termination payments to the extent that they

are provided in the proponent’s workplace or if none, the OPS. Any pay-

ments made under Article 53 or 78 of the Collective Agreement shall be set

off against any calculation of severance pay under a collective agreement or

term of employment with the receiving employer in respect of OPS service.

Such payments under articles 53 and 78 may be set off against severance

payments under the Employment Standards Act 2000 in accordance with

that Act.

6.2.1 In the event that a receiving employer does not fully agree to the request in

in article 6.1.1, including the matter of a probationary period, the employer may offer the receiving employer a financial incentive up to the amount that would have been payable as enhanced severance pay (calculated as provided in paragraph 4 of Appendix 9) to each employee affected by the transfer that the employer determines will be declared surplus, in order to secure or improve a job offer to the employee equivalent to a job offer as described in Article 6.1.1 above or to ensure where job offers are received from the receiving employer for less than the full complement of employees identified by the employer, that the receiving employer offer employees jobs on the basis of seniority. The parties agree in no case will the employer be required to pay a financial incentive in excess of the maximum of enhanced severance for the affected employees.

The general obligation on the Employer to make reasonable efforts to obtain job

offers and terms and conditions of employment which mirror those of OPS employees are contained in Article 6 for a negotiated transfer. This general obligation must be considered in light of Appendix 9, Appendix 18 generally and the case law dealing with reasonable efforts issues. Section 6.1.1 refers specifically to the recognition of OPS service and seniority in relation to layoff and severance. Section 6.2.1 provides that the Employer may offer the receiving employer a financial incentive based on an enhanced severance calculation should the receiving employer not fully agree to mirror the OPS terms and conditions of employment. This provision makes it clear that the incentive payment is directly linked to the Employer’s efforts to obtain the items referred to in section 6.1.1.

Appendix 18 makes reference to two dispute resolution processes. Certain disputes must be determined under Article 8.0 and other disputes that arise concerning Appendix 18 proceed under Article 4.2. For disputes which need not be determined pursuant to Article 8.0, the time limit for filing a Union grievance is contained in Article 22 of the Collective Agreement. Section 22.13.1 of that Article provides that “the Union shall be entitled to file a grievance at the second stage of the grievance procedure provided it does so within thirty (30) days following the occurrence or origination of the circumstances giving rise to the grievance”. As Article 8.0 makes clear, disputes about Article 6.0 of Appendix 18 are governed by the time limit in section 8.3. Sections 8.1 and 8.3 read as follows:

8.0 Agreement and RFP Review

8.1 All disputes arising out of Article 5.0, 6.0 or 6C.0 must be determined

pursuant to Article 8.0. Any other grievances under this agreement will go

through the dispute resolution process in Article 4.2.

8.3 When the employer signs a transfer agreement with a hospital, municipality,

or other employer in respect to transfers under Schedule B, the employer

agrees that OPSEU will be provided with a copy of the transfer agreement that the employer has signed with the municipality, hospital or other receiving employer. If OPSEU believes that the transfer agreement is not in compliance with Article 6.0, OPSEU may refer the matter to mediation/arbitration within a seven (7) calendar day time period and the matter must be resolved within that time period.

The Memorandum of Agreement in which the Crown agreed to transfer the governance and management of the LPH to St. Joseph’s is dated February 8, 2000 (“the Transfer Agreement”). Attached to the Transfer Agreement is a Schedule B dealing with benefits and a Schedule C dealing with working conditions. The Transfer Agreement was provided to OPSEU within a week of February 8, 2000. OPSEU did not raise an issue about the Transfer Agreement within seven calendar days of having received it.

The transfer of the LPH to St. Joseph’s occurred on June 23, 2003, approximately three years and four months after the execution of the Transfer Agreement. The LPH notified its staff of the transfer date in a written communication distributed on March 21, 2003. In 2002, after the Crown had entered into the Transfer Agreement, the Crown and OPSEU negotiated a new Collective Agreement covering the period from January 1, 2002 until December 31, 2004. It therefore became necessary for the Employer and St. Joseph’s to update the terms of the schedules attached to the Transfer Agreement to reflect the relevant terms of the current Collective Agreement between OPSEU and the Crown. OPSEU filed a grievance dated January 7, 2003, which referred to the Employer’s failure to update the Transfer Agreement. The Crown and St. Joseph’s did revise the Transfer Agreement by updating the terms and conditions of employment contained in the schedules and OPSEU was provided with the final version of these schedules on April 23, 2003.

On April 23, 2003, OPSEU and St. Joseph’s entered into a voluntary recognition agreement covering certain employees employed at the LPH site. This agreement was ratified on May 6, 2003. On or about April 22 or 23, 2003, OPSEU was advised that the Crown did not pay the financial incentive to St. Joseph’s and that if it received the incentive payment St. Joseph’s would share it accordingly.

It appears that the first time OPSEU raised a concern about the substance of the Transfer Agreement was in two letters dated March 27, 2003, from the President of OPSEU to the Deputy Minister of Management Board Secretariat. In response to a request for particulars, counsel for the Union provided particulars of the May 1, 2003 grievance in a letter dated May 22, 2003. At the hearing, counsel for the Union indicated what issues were still of concern to the Union and he stated that they related to the failure of the Employer to make reasonable efforts to mirror the OPS terms and conditions in two areas. In particular, he referred to the absence in the Transfer Agreement of a pension bridging provision and the absence of certain terms protecting employee’s rights upon layoff or termination. For convenience, I will refer to the dispute about these absent terms as the Section 6.1.1 issues. The Union believes that the absence of the layoff and termination terms are important since very few of the programs offered at LPH will remain at St. Joseph’s, thereby potentially affecting the job security of the transferred

employees. Counsel submitted that the failure of the Employer to make reasonable

efforts to secure these provisions for the transferred employees constitutes a contravention of Article 6.0 of Appendix 18. Counsel also argued that the failure of the Employer to provide St. Joseph’s with the financial incentive is a violation of Section 6.2.1 of Appendix 18. If successful in proving these violations, the Union will seek an order directing the Employer to attempt to negotiate with St. Joseph’s to obtain the pension bridging provision and the terms relating to layoff and termination. The Union will also seek an order directing the Employer to offer St. Joseph’s the financial incentive referred to in Section 6.2.1 of Appendix 18.

The Employer’s position on the merits of the grievance is that it complied with its reasonable efforts obligation in this instance and that it did not contravene Sections 6.1.1 and 6.2.1 of Appendix 18. With respect to its timeliness objection, counsel for the Employer noted that the grievance is based on alleged violations of Article 6.0 of Appendix 18 and he argued that the appropriate time limit for this type of dispute is set out in Section 8.3. Counsel submitted that the seven calendar day time period began to run when OPSEU was provided with the Transfer Agreement in February 2000. He argued that the Section 6.1.1. issues which the Union is now raising would have been obvious to the Union in February 2000 and that the updating process which resulted in revisions to the schedules did not create any new issues. Counsel submitted that a concern about the failure to pay the financial incentive referenced in Section 6.2.1 should have been addressed by the Union within the seven calendar day time period. Counsel argued that, given the structure agreed to by the parties for raising a challenge to a

transfer agreement, a grievance filed more than three years after the Union was provided

with a copy of the Transfer Agreement is grossly out of time.

The Union concedes that the grievance is untimely if it does not have the right to grieve in 2003 and counsel indicated that the Union is not requesting an order extending the time in excess of three years so as to make the filing of the grievance timely. The Union takes the position that the event which gives it the right to grieve in 2003 is when it was advised in April 2003 that the Employer did not provide St. Joseph’s with the financial incentive. Counsel noted that it was provided with this information at about the same time that it received the final version of the updated schedules which are attached to the Transfer Agreement. Counsel noted that there is no indication on the face of the Transfer Agreement as to whether the financial incentive was paid or not and he argued that a breach did not crystallize in this instance until the Union was advised in April 2003 that the financial incentive had not been paid.

Counsel for the Union also argued that the general dispute resolution process under Article 4.2 is applicable in this case since the violation of Section 6.2.1 relates to the application of the Transfer Agreement and not to its substance. Counsel submitted that the grievance is timely because it was filed about eight days after the Union was told that the financial incentive had not been paid, well within the thirty day time period contained in Section 22.13.1 for filing a Union grievance. If the time frame in Section 8.3 is applicable, counsel argued I should exercise my discretion to extend the time for dealing with this dispute to the hearing date, having regard to the importance of the issues for the transferred employees, the relatively short delay and the absence of any prejudice to the Employer.

In Ministry of Health and Long-Term Care and OPSEU, GSB File 1495/00, Vice-Chair Brown dealt with a timeliness objection by the Employer with respect to Union grievances relating to the transfer of four psychiatric facilities to hospitals. The essence of OPSEU’s position was that the Crown did not make sufficient efforts to persuade the receiving hospitals to leave transferred employees in the OPSEU Pension Trust (“OPT”). OPSEU advanced three grounds in support of its position, including one based on Article 6.0 of Appendix 18. OPSEU argued that the time limit in Section 8.3, which requires a grievance to be resolved within seven days of the Union’s receipt of a transfer agreement, did not apply in the circumstances because the provision only addressed complaints relating to the contents of a transfer agreement and did not concern matters of implementation. Vice-Chair Brown concluded that the essence of the Union’s position was that the transfer agreements themselves contravened Article 6.0 and that the time limit in Section 8.3 applied to the grievances insofar as they were based on Article 6. Given that the time begins to run under Section 8.3 when the Union received the transfer agreements and that the grievances were filed at least ten months late, Vice-Chair Brown decided not to extend the time for the filing of the grievances with respect to the Article 6.0 allegation.

The central issue to be determined relating to the Employer’s timeliness objection

is when in these circumstances does the time for filing a grievance begin to run. The

Employer argues that the seven calendar day time period began to run in February 2000 when OPSEU received a copy of the Transfer Agreement. I agree with the Employer’s position that the Union’s receipt of the revised schedules of the Transfer Agreement in April 2003 is not a relevant consideration in connection with the timeliness issue. The updating process which resulted in the revised schedules did not result in any new Section 6.1.1 issues. In other words, the pension bridging issue and the severance and layoff issues which the Union now relies on as alleged deficiencies in the Transfer Agreement existed when the Union received the Transfer Agreement in February 2000. In these circumstances, the time for filing a grievance did not start to run when the Union received revised schedules to the Transfer Agreement in April 2003.

The Union takes the position that the time begins to run when it was told on or about April 22 or 23, 2003 that the Employer did not pay the financial incentive referred to in Section 6.2.1. The Union submits that it was not in a position to raise the issue of the Employer’s failure to pay the financial incentive earlier because the Transfer Agreement does not address the issue, an issue in any event which relates to the administration of a transfer agreement and not to its substance.

As previously noted, there is a direct connection between Section 6.2.1, the financial provision, and Section 6.1.1. The payment of the financial incentive only becomes an issue if the Employer is unable to secure from the receiving hospital the OPS terms and conditions of employment as reflected in Section 6.1.1. The payment of the financial incentive is to assist the Employer in obtaining job offers that reflect as closely as possible the OPS terms and conditions of employment. The remedy the Union seeks in this instance illustrates the relationship between Sections 6.1.1 and 6.2.1. In addition to requesting that the Employer be directed to offer the financial incentive to St. Joseph’s, the Union seeks an order directing the Employer to attempt to negotiate with St. Joseph’s to attain terms and conditions of employment in certain areas which mirror the terms and conditions of the OPS agreement. In the absence of Section 6.1.1 issues, the payment of the financial incentive is irrelevant.

A grievance filed in 2003 which merely asserted that the Employer did not make reasonable efforts to attain certain OPS terms and conditions of employment in a transfer agreement negotiated in 2000 would be clearly out of time. The Section 6.1.1 issues which the Union now wishes to address existed when it received the Transfer Agreement in 2000 and should have been pursued within the time frame prescribed in Section 8.3. Even if the Union grievance in 2003 were found to be otherwise timely and successful, an order directing the Employer to attempt to negotiate the Section 6.1.1 issues with St. Joseph’s would likely be inappropriate in the circumstances. The Union is attempting to obtain indirectly what it cannot obtain directly, given that a challenge to the Transfer Agreement only on the basis of the Section 6.1.1 issues would be untimely.

In considering the position of each party, it is my view that the Employer’s position has considerable merit. Section 8.1 provides that all disputes arising out of Article 6.0 must be determined pursuant to Article 8.0, which of course includes Section 8.3 and the stringent time limits contained therein. The Union’s allegation that the Employer did not pay the financial incentive is a dispute which arises out of Article 6.0. The fact that the Union was told in April 2003 of the Employer’s failure to pay the financial incentive does not mean that its obligation to challenge the Transfer Agreement did not arise in February 2000, within the time limit set out in Section 8.3. Just as there are deficiencies in the Transfer Agreement from the Union’s perspective because of the absence of some OPS terms and conditions of employment, there is similarly no reference in the Transfer Agreement to the payment of a financial incentive. The presence of certain Section 6.1.1 issues and the absence of an indication in the Transfer Agreement that a financial incentive would be paid to St. Joseph’s is a reasonable basis upon which the Union could have concluded in February 2000 that no financial incentive had been paid to St. Joesph’s and that the Transfer Agreement was not in compliance with Article 6.0. Even if the absence of any reference to the payment of a financial incentive in the Transfer Agreement, by itself, is not a basis for concluding that there has been a potential contravention of Section 6.2.1, such an absence, in the face of certain Section 6.1.1 issues, should have caused the Union to inquire about whether the financial incentive had been offered to St. Joseph’s. Where certain Section 6.1.1 issues exist and given the direct relationship between such issues and the payment of the financial incentive, the Union is at least obliged to make the appropriate inquiry. In my view, the Union cannot rely on the fact that it was not told of the Employer’s failure to pay the financial incentive until April 2003 when it did not ask the obvious question of the Employer at the relevant time, which is when it received a copy of the Transfer Agreement in 2000.

The time limit in Section 8.3 indicates that these parties intended that disputes arising out of Article 6.0 are to be addressed and resolved quickly. In this instance, the Union did not raise any issues relating to Section 6.1.1 in a timely manner. An issue of the payment of the financial incentive is directly related to the substance of the Transfer Agreement and accordingly it must be addressed within the time frame set out in Section 8.3, with the time for referring the matter to mediation/arbitration starting when the Union received a copy of the Transfer Agreement. It is my conclusion that the time for the Union to challenge the Transfer Agreement and the Employer’s failure to pay the financial incentive arose in February 2000 and not in April 2003 when it was advised that the financial payment had not been paid to St. Joseph’s.

For the foregoing reasons, it is my conclusion that the Union grievance dated May 1, 2003 is untimely. Accordingly, this grievance is dismissed.

Dated at Toronto, this 8^th^ day of March, 2004