GSB# 2003-4112

UNION# 2004-0999-0010

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 Energy)

Employer

BEFORE

Richard Brown

Vice-Chair

FOR THE UNION

Gavin Leeb

Barrister and Solicitor

FOR THE EMPLOYER

David Strang

Acting Associate Director

Management Board Secretariat

HEARING

April 1 & 16, 2004.

Decision

This union grievance, dated March 24, 2004, arises out of the transformation of the Ontario Energy Board (OEB) from a component of the Ministry of Energy to an agency outside the Ontario Public Service. Public servants who worked for the OEB as part of the Ministry were offered jobs by the new agency. Based upon the premise that these offers do not permit seniority to be “carried over” within the meaning of article 6.0 of Appendix 18 to the collective agreement—a premise contested by the employer—the union claims the employees concerned are entitled to exercise the rights contained in article 20 of the collective agreement and paragraphs 2 to 5 of Appendix 9. This award deals exclusively with the employer’s preliminary objection that the grievance was not filed within the applicable time limit.

I

A labour-management committee was created to address issues relating to the transfer and members of the committee met approximately once a month from September of 2003 to March of 2004. Between December and early February, the union was given a series of at least four draft transfer agreements between the Ministry of Energy and the new agency. The final agreement was provided to the union on February 9. The transfer took place on March 26, 2004.

During the months preceding the transfer, both union committee members and the workforce at large were told consistently by management that its objective was to negotiate an agreement with the new OEB which would ensure that transferring employees received at least 85% of their previous earnings and allowed OPS seniority and service to be carried over. In the end, employees actually enjoyed a pay increase when they moved to the receiving agency.

The union’s primary concern underlying the grievance relates to a limitation on the positions that first must be posted and then filled on the basis of seniority where the qualifications of applicants are “relatively equal.” In the first draft agreement, provided to the union in December of 2003, the new OEB undertook to post jobs only in “typical circumstances.” In response to questions asked by the union representatives about the meaning of “typical circumstances”, later versions of the transfer agreement listed a number of examples where jobs would not be posted. One of these exceptions is of particular concern to the union: “a new position and/or functional area, such as payroll/ HR or controller, which did not exist before.”

This exception appears in the final transfer agreement. Paragraph 11.1 of Schedule C to the agreement states:

Where the OEB determines that a vacancy exists in a regular full-time position, it shall, in typical circumstances, post the vacancy for at least fifteen (15) days prior to the closing date. The posting shall include the job title, location, salary range, a general description of the job duties. qualifications and any other information the OEB deems relevant. For the purpose of Schedule C, situations such as the following are examples of when it may be deemed not to be a typical circumstance, for example; when there is a known and chronic scarcity for a set of qualifications for a particular type of work; when a qualified candidate has been identified from another competition, completed within the previous 12 months, for a position with substantially similar requirements and selection criteria; when an assignment is made in accordance with the staff planned career progression/development and is supported by an individual development and training plan; when a full time position is being converted to part time (or vice versa) for operational or compassionate reasons; where an employee requests and the employer agrees for a transfer to a vacant position for health reasons or on compassionate grounds; where a new position and/or functional area, such as payroll/ HR or controller, which did not exist before. (emphasis added)

The subject of job postings was also canvassed in an “employee guide” prepared by the new OEB and delivered to employees on March 8, 2004 along with their job offers. The guide indicates the requirement to post a position would not apply “where a new position and/or functional area did not exist before.” There is no reference in the guide to payroll, human resources or controller. When union representatives voiced a concern that this exception to the posting requirement was worded differently in the guide than in the transfer agreement, the new OEB issued a memorandum to all employees stating: “the [transfer agreement and its schedules] are attached as they are referenced in the Employee Guide dated March, 2004. In case of ambiguity, the superior benefit prevails” (emphasis added). This memorandum was intended to reassure employees that the new agency would comply with the transfer agreement.

II

The transfer of operations from the Ministry of Energy to the new OEB is governed by article 6 of Appendix 18 to the collective agreement, the relevant parts of which state:

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. …

6.1.2 The Employer agrees that in any negotiations with the receiving employer it is to be understood that the employer will request that employees of the Crown who are transferred under Article 6.0- Negotiated Transfers should not be required to serve a probationary period with the new employer.

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

6.5 If an employee refuses a job offer which provides a salary of at least 85% of the respective employee’s weekly salary at the time of the transfer and recognizes the service and seniority in the Ontario Public Service (OPS) of each employee for the purpose of qualification for vacation, benefits (except pension), layoff, job competition, severance and termination payments to the extent that they are provided in the proponents workplace, the employee shall be deemed to have resigned effective the date of the transfer of their job and no other provision of the collective agreement will apply except for Article 53 or 78 (Termination Pay).

6.6 Where the salary of the job offered by the receiving employer is less than eighty-five percent (85%) of the employee’s current weekly salary, or if the employee’s service or seniority are not carried over to the receiving employer, the employee may decline the offer. In such a case, the employee may exercise the rights prescribed by Article 20 (Employment Stability) and/or paragraphs 2 to 5 of Appendix 9. …

The grievance contends the job offers made to employees do not allow seniority to be carried over within the meaning of article 6.6, in the sense that, although employees will carry over their OPS seniority in general, they will not be able to use it to bid on any jobs filled by the new agency without a posting.

III

What time limit applies to the filing of this grievance? Appendix 18 contains two dispute resolution procedures, each with its own limitation period for grievances. Some disputes are governed by article 4.2 and others by article 8.0.

Article 4.2 states:

The parties agree that disputes that arise regarding the interpretation or application of this agreement that are unresolved at Stage 1 of the grievance process will proceed as follows …

On its face, this article applies to “disputes that arise regarding the interpretation or application of this agreement” [i.e. Appendix 18]. For such disputes, article 4.2 modifies some aspects of the normal grievance process, but leaves unaltered the time limit of thirty days for the filing of union grievances, as found in article 22.13.1:

22.13.1 Where any difference between the Employer and the Union arises from the interpretation, application, administration or alleged contravention of the Agreement, 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.

It is common ground that “days” for this purpose do not include Saturdays, Sundays and designated holidays by virtue of article 22.14.2. According to the union, the time limit in article 22.13.1 applies to the instant grievance.

Article 8.0 prescribes a different process for resolving some disputes under Appendix 18. This article states:

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.

8.2 When the Employer releases a tender under Schedule A or C, the Employer agrees that OPSEU will be provided with a copy of the RFP that the Ministry has released. If OPSEU believes that the tender is not in compliance with either Article 5.0 or Article 6C.0 as appropriate, OPSEU may refer the matter to mediation/arbitration and the matter must be resolved 15 days prior to the closing of the tender.

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 ministry contends the grievance is governed by article is 8.3 which allows only seven calendar days, not just for filing a grievance, but for resolving the underlying dispute.

IV

Does this grievance fall under article 4.2, with a time limit of thirty working days for launching a grievance, or under article 8.3 with a time limit of seven calendar days for resolving a dispute?

Noting article 8.1 states “all disputes arising out of Article … 6.0 … must be determined pursuant to Article 8.0”, employer counsel asserts the current dispute, about the application of articles 6.5 and 6.6 to job offers, is a dispute “arising out of” article 6.0. Counsel also contends the purpose of article 8.0 is to ensure all disputes relating to a transfer are resolved before the transfer takes place. According to this argument, it would make no sense to resolve some issues within seven calendar days if grievances about related matters need not be filed for thirty working days. Counsel submitted it is reasonable to assume offers made to employees by a receiving employer will comply with the preceding transfer agreement: i.e. that an agreement specifying terms and conditions of employment meeting the criteria in article 6.5 will result in matching job offers. In the unlikely event the offers actually made to employees were less generous than the associated transfer agreement, something which typically would not be known within seven days of the agreement being provided to the union, counsel for the employer suggested there would be grounds for the extension of time for a grievance contending employees were entitled to exercise the rights specified in article 6.6 because the offers were deficient.

Union counsel emphasizes the grievance at hand challenges neither the contents of the transfer agreement nor the efforts made by the employer when negotiating it. In other words, the union does not allege a violation of article 6.1 or 6.2.1. Counsel concedes the seven-day time would apply to a grievance, based upon either of these articles, contesting the terms of the agreement or the effort put into it. The time limit in article 8.3 is said not to apply to the instant grievance about the employer’s characterization of job offers as meeting the criteria in article 6.5 and the consequent denial of rights specified in article 6.6. Addressing a scenario where the transfer agreement requires the terms and conditions of employment specified in article 6.5, and where the union learns after the expiry of the time limit in article 8.3 that job offers fall short of this mark, union counsel asserts the collective agreement should not be interpreted so as to preclude a grievance unless an arbitrator can be persuaded to extend the time for filing one.

In reply, employer counsel argues the current grievance, alleging job offers matching the transfer agreement do not meet the criteria in article 6.5, is in essence a grievance contending the transfer agreement does not comply with that article.

V

There are two cases dealing with the application of the seven-day time limit in article 8.3. In Ministry of Health and OPSEU, GSB No. 1495/00, decision dated January 24, 2002, I held this limitation period applied to a union grievance contending the employer had violated article 6.0 by not making sufficient efforts to persuade the receiving employers to leave transferred employees in the OPSEU Pension Trust. I wrote:

Article 14 of the transfer agreements, as provided to the union in the early months of 2000, allowed the receiving hospitals to choose between HOOPP and OPT. Not until September of 2000 did OPSEU learn the hospitals had chosen HOOPP. Yet the root of the union’s present complaint against the Crown, under article 6.0, resides not in the choice made by the hospitals but in the transfer agreements which left this option open to them. If the union’s interpretation of article 6.0 prevails, the province would be required to endeavour to negotiate with the hospitals to establish a new pension arrangement which would supersede article 14 of the transfer agreements. In short, the essence of the union’s argument is that the agreements themselves contravene article 6.0. The purpose of the strict time limit in article 8.3 is to ensure the expeditious resolution of disputes, such as those at hand, about whether a transfer agreement does comply with article 6.0. This analysis leads me to conclude article 8.3 applies to these grievances insofar as they are based on article 6. (pages 6 and 7)

Article 8.3 was again applied in Ministry of Health and OPSEU, GSB No. 2003-0337, decision dated March 8, 2004 (Petryshen). In that case, the transfer agreement was provided to the union in February of 2000 but the transfer did not occur until June of 2003. The union learned in late April of 2003 that the employer had not paid a financial incentive to the receiving hospital and this disclosure led to a grievance being filed at the beginning of May. Vice-Chair Petryshen wrote:

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. …

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. … 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. (pages 9 to 11)

In both of these cases, the union contended the terms and conditions of employment specified in the transfer agreement were inadequate because the employer had not made sufficient efforts to persuade the receiving enterprise to make job offers more favourable to employees. The remedy sought in each case was an order directing the employer to renegotiate the agreement in an attempt to improve terms and conditions of employment. The seven-day limit in article 8.3 for resolving a dispute was held to apply to these matters.

Article 8.3 speaks of disputes about whether a “transfer agreement” is “in compliance with article 6.0.” In the two cases discussed above, the short time limit in article 8.3 was applied, even though the violation asserted in the grievance lay not in the alleged inadequacy of the transfer agreement itself, but in the employer’s allegedly insufficient attempt to secure a better deal for employees. If the employer had made the efforts required by articles 6.1 and 6.2.1, but failed to persuade the receiving enterprise to enrich the terms and conditions of employment, there would have been no contravention of article 6.0, despite any deficiencies in the agreement. This is why the violation alleged concerned the employer’s approach to bargaining, not merely the contents of the agreement itself.

In my view, reading article 8.3 as applying to disputes about whether the employer’s conduct at the bargaining table complies with article 6.0 is fully warranted, even though this article speaks of a transfer agreement not complying with article 6.0. In the two cases discussed above, the remedy sought was the re-opening of negotiations in the hope of changing the agreement. In other words, a dispute about the adequacy of the agreement underlay the grievance in each case. Moreover, construing article 8.3 as applying only to grievances solely about the contents of a transfer agreement would render the seven-day time inapplicable to disputes arising from articles 6.1 and 6.2.1, two provisions at the heart of article 6.0. Articles 6.1 and 6.2.1 specify what efforts the employer must make when negotiating a transfer agreement, but nothing in article 6.0 specifies any criteria that such an agreement must meet.

Under article 8.3, time begins to run when a transfer agreement is provided to the union. This temporal starting point is appropriate in the context of a dispute about the sufficiency of the employer’s efforts. A starting point before the agreement is complete would make no sense, because there would be little point in the union contesting the propriety of management’s conduct before knowing the contents of the resulting agreement. The rationale for rejecting a later starting point is explained in the above excerpt from the decision of Vice-Chair Petryshen. Once the union knows the agreement does not meet its expectations, it can make inquiries about the employer’s efforts and decide whether a grievance is warranted.

VI

Does the time limit in article 8.3 apply to the current dispute about how article 6.0 applies to the job offers made by the new OEB?

Articles 6.5 and 6.6 do not specify criteria that job offers must satisfy. Instead, these articles determine what rights under the collective agreement an employee is entitled to exercise, if he or she declines a job offer from the receiving enterprise, with the determination of contractual entitlements being based upon the content of the offer. If the salary offered is at least 85% of the employee’s current earnings, and if OPS seniority and service are to be carried over, then the employee’s only entitlement under the collective agreement is to receive termination pay, according to article 6.5. If the offer is less generous in relation to salary or seniority and service, article 6.6 entitles the employee to the benefit of article 20 of the collective agreement and paragraphs 2 to 5 of Appendix 9.

In this contractual context, it makes no sense to speak of job offers “complying” with article 6.5 or 6.6. The reason is these articles contain no requirements with which such offers are expected to comply. Instead, articles 6.5 and 6.6 delineate two possible categories of job offers and specify the entitlements under the collective agreement of an employee who declines an offer of each type.

The union contends employees who declined a job offer were entitled to exercise the rights specified in article 6.6, because the job offers did not entail a carry over of seniority within the meaning of that article. Contending the offers allowed seniority to be carried over, the employer submits the refusal of a job offer would have disentitled an employee to all benefits under the collective except termination pay, according to article 6.5. This is substantive dispute between the parties.

This sort of dispute, about the quality of job offers, does not readily fit the type described in article 8.3: i.e. disputes about whether a “transfer agreement” is “in compliance with article 6.0.” The fit would be poor for any case of this sort, even though the terms of job offers typically reflect those specified in the associated transfer agreement. Neither job offers nor transfer agreements can be sensibly labelled as complying, or not complying, with articles 6.5. or 6.6. Rather than regulating the content of job offers themselves, these articles divide all logically possible offers into two types and determine what entitlements flow when offers of either type are declined. The content of job offers per se is ungoverned by article 6.0, unlike the employer’s conduct when negotiating a transfer agreement which is regulated by articles 6.1 and 6.2.1. This distinction renders the two cases discussed above inapplicable to the facts at hand.

The occurrence that commences the running of time under article 8.3—the delivery of a transfer agreement to the union—makes no sense for some disputes that might arise under articles 6.5 and 6.6. In particular, this starting point would be illogical in a case where job offers made to employees do not match the transfer agreement. While such offers usually mirror the preceding agreement, there is no guarantee the two will be the same. Offers typically are made much later than seven days after delivery of the transfer agreement. In a case where the transfer agreement leads the union to expect jobs to be offered on the terms described in article 6.5, and the employer treats employees accordingly, but where the offers eventually made are of the sort described in article 6.6, any grievance about the treatment of employees would be untimely under article 8.3, even if the union grieved as soon as the job offers were received. It seems unlikely those who negotiated Appendix 18 intended such an outcome, one that would force the union to rely exclusively upon an arbitrator to extend the time for filing a grievance.

This analysis leads me to reject the employer’s interpretation of article 8.0 and to conclude the time limit in article 8.3 does not apply to the instant grievance. Notwithstanding the sweeping language of article 8.0, saying it applies to all disputes arising out of article 6.0, the most reasonable construction of the wording of article 8.3 indicates its seven-day time limit does not apply to this grievance.

VII

The applicable time limit is found in article 22.13.1. As the parties agree the grievance was filed with the period specified by this article, the employer’s preliminary objection is dismissed.

Dated at Toronto this 3^rd day of May 2004.