GSB# 1999-1977, 2000-1013, 2000-1302, 2000-1610, 2001-0969, 2001-0970
UNION# 00D159, 00D390, 00D461, 01C066, 01B311, 01B312
IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
BETWEEN
Ontario Public Service Employees Union (Anthony et al.)
Union
- and -
The Crown in Right of Ontario (Ministry of Labour)
Employer
BEFORE
Randi H. Abramsky
Vice-Chair
FOR THE UNION
Richard Blair Ryder, Wright, Blair & Doyle Barristers and Solicitors
FOR THE EMPLOYER
Andrew Baker Counsel Management Board Secretariat
HEARING
February 28, 2005.
Award
The parties’ dispute the proper interpretation of the Letter of Understanding entered into on June 25, 1999, regarding “Certain Classification Adjustments under the Administrative Bargaining Unit Collective Agreement.” The parties dispute the rate of pay assigned to the grievors, Employment Standards Auditor 2’s, by the Ministry of Labour, pursuant to this agreement.
Facts
For the purposes of this Award only, a number of facts were agreed to by the parties. The grievors are all Employment Standard Auditor 2’s (ESA 2s). Prior to the 1999-2001 collective agreement, most of the grievors were at the fifth step (out of six) in the salary progression for that position, earning $991.75 weekly. Some of these individuals were quite adversely impacted by the Social Contract Act, which froze their salaries for a number of years.
During collective bargaining for the 1999-2001 agreement, the parties agreed to create new class standards and establish a new pay framework for a number of classifications in the administrative bargaining unit, including the ESA 2’s. That agreement provides, in relevant part, as follows:
The parties agree to certain classification adjustments as reflected in the attached. The adjustments will be effective January 1, 1999.
The parties agree that these classification adjustments shall not be challenged by either party under the Pay Equity Act, because they reflect adjustments to address skills shortages as contemplated by Section 81(1) (e) of the Pay Equity Act.
Signed this 25^th^ day of June, 1999, in Toronto, Ontario
ADM
Tax Auditors
ADM
Systems Officer Series
ADM
Inspectors/Investigators
It is agreed that the employer will undertake a review of the following classes, with a view to updating/revising class standards and establishing a new pay framework for the identified investigator classes.
The pay framework shall have 3 to 4 salary ranges.
The minimum and maximum of the two highest ranges shall be as follows:
2^nd^ highest salary range:
minimum $1000 per week maximum $1158 per week
highest salary range:
minimum $1080 per week maximum $1242 per week
The lowest salary ranges as well as steps between the minimum and the maximum shall be established upon completion of the new class standards.
Highest salary range: Populations
Environmental Officer 5 investigator jobs 66 (approx)
Fire Services Investigator 2 10
2^nd^ highest salary range:
Employment Standards Auditor 2 104
Environmental Officer 4 investigator jobs 195 (approx)
Fire Services Investigator 1 32
Human Rights Officer 2 45
Occupational Health & Safety Inspector 2 202
The lower salary range(s):
Employment Standards Auditor 1 29
Public Health Inspector 3 1
Safety Instruction Officer 2 7
Safety Instruction Officer 3 3
Field Worker 1, Homes for special care 4
Total 689
Employees whose current salaries are below the minimum of the new range for their revised class, shall move to the new minimum.
Employees whose currently salaries are equal to or between the minimum and maximum of the new range for their revised class shall move to the step that is closest to but not less than their existing rate of pay.
Employees shall retain their current hours of work schedule and overtime entitlements.
The 1999 general wage increase will be applied to the above ranges.
The Employer agrees there will be no wage decrease as a result of the updating/revising class standards and establishing a new pay framework for the identified investigator classes.
The collective agreement for the Administrative Bargaining Unit was also signed off by the parties on June 25, 1999. In Article ADM17.1 the parties agreed that “[t]he effective date of any changes to the terms of this Agreement from the previous Agreement, unless otherwise indicated, shall be March 27, 1999.” In Article ADM 16.1, the parties agreed as follows in regard to salary:
ADM 16.1 (a) Effective January 1, 1999, salary rates shall be increased as follows:
January 1, 1999 1.00%
January 1, 2000 1.35%
January 1, 2001 1.95%
In implementing the January 1, 1999 wage increase of 1%, the parties agreed that it was implemented in May 1999, retroactively to January 1, 1999. This 1% wage increase, when applied to the grievors’ salary of $991.75, led to a new weekly salary of $1001.67. Also, during the period of January 1, 1999 to June 25, 1999, some employees had anniversary dates and moved to the final, sixth step of the salary progression for ESA 2’s, or $1038.89 (including the 1% January 1, 1999 increase).
Thus, it can be seen that as of December 31, 1998 – the last effective day of the prior collective agreement – the grievors’ were earning $991.75. That places them within the paragraph of the Letter of Understanding which reads: “Employees whose current salaries are below the minimum of the new range for their revised class, shall move to the new minimum.” The new minimum for the ESA 2 position was $1000.00 per week.
Conversely, as of June 25, 1999, the grievors’ salary, after the implementation of the 1%, was $1001.67, or higher if they had an intervening anniversary date. That would place them within the sentence that reads: “Employees whose current salaries are equal to or between the minimum and maximum of the new range for their revised class shall move to the step that is closest to but not less than their existing rate of pay.”
At some point – and the date is not contained in the record – the steps between the minimum and maximum were included in the collective agreement. A new classification number was created for ESA 2’s, 05523, with the following salary progression:
05523 EMPLOYMENT STANDARDS AUDITOR 2
Pre 1999 1%
01/01/99
1000.00
1039.71
1079.42
1119.00
1158.00
With 1%
01/01/99
1010.00
1050.11
1090.21
1130.19
1169.58
With 1.35%
01/01/00
1023.64
1064.29
1104.93
1145.45
1185.37
With 1.95%
01/01/01
1043.60
1085.04
1126.48
1167.79
1208.48
The parties’ dispute centres on when – what date – the grievors’ placement into the new class series should have been determined. The Employer, relying on the sentence in the Letter of Understanding that reads “The adjustments will be effective January 1, 1999”, determined that the grievors’ salary, as of December 31, 1998, should be used to determine placement. Accordingly, the grievors who were at the fifth step of the old salary progression, earning $991.75 per week, were placed at the new minimum of $1000 per week, then given the 1% adjustment to the range, for $1010.00 per week.
In the Union’s view, that approach was in error. Instead, given that the date of the Letter of Understanding is June 25, 1999 and the language of the Letter of Understanding that placement is to be determined by the employees’ “current salaries”, the Union submits that the grievors’ placement should be based on their salary, current as of June 25, 1999, which would include the 1% general salary increase and any interim progression on the salary schedule. Under this approach, the grievors’ salaries were “between the minimum and maximum of the new range for their revised class [and] shall move to the step that is closest to but not less than their existing rate of pay.” In the Union’s view, the grievors’ should have been placed at the $1039.71 step, and, with the 1% added to that range, been paid at $1050.00 per week. It also relies on the language that “there will be no wage decrease as a result of the updating/revising class standards…”
Decision
In my view, the June 25, 1999 Letter of Understanding is quite ambiguous in regard to the date for determining employee placement in the new salary range. One could read it as the Union does – that the employees’ “current salary” as of June 25, 1999 is the date. Or one could read it as the Employer did – that you compare the employees’ “current salary” under the old system to the range set forth in the new system, based on the language that the “adjustments will be effective January 1, 1999.”
For the reasons set forth below, I conclude that the Employer did not violate the Letter of Understanding when it determined the grievors’ placement on the new salary range.
First, although the Letter of Understanding was agreed to on June 25, 1999, there is no indication that this date would be determinative of anything. The collective agreement for the Administrative Bargaining Unit was also agreed to on that date, but the parties’ specifically agreed that “[t]he effective date of any changes to the terms of this Agreement from the previous Agreement, unless otherwise indicated, shall be March 27, 1999.” Thus, June 25, 1999 was not the “effective date” of changes to the agreement – including the Letter of Understanding, which is part of the collective agreement. Rather the effective date is March 27, 1999, “unless otherwise indicated.” No one contends that the effective date of the Letter of Understanding is March 27, 1999. Instead, the Employer argues that the date of January 1, 1999 is “otherwise indicated”. Consequently, despite the words “current salary” in the Letter of Understanding, it is not at all clear that the parties’ meant “current salary” as of June 25, 1999 – although that it certainly one possibility.
Another possibility is that the words “current salary” means the employees’ salary at the time of the changeover to the new system. When one considers what the parties were doing – creating a new class standard and pay framework – with a new, significantly higher minimum and maximum, it makes sense to compare, based on the employees’ salary under the old system, where the individual would land on the new system, for initial placement. That is what the Employer did.
In my view, moreover, the Union’s position is not consistent in relation to the 1% general wage increase. The Union seeks to have the 1% increase count towards the employees’ “current salary” for placement on the new salary range but not apply it to the range itself. It asserts that the 1% is added later, prospectively, for future collective bargaining purposes. I cannot agree. If the 1% is added to the grievors’ salary for placement purposes, but not for determining placement on the salary range, the salary range should also be adjusted by the 1% so that both are “current” as of June 25, 1999. I see no basis to include it for one purpose but not the other. The agreement states: “The 1999 general wage increase will be applied to the above ranges.” It seems selective to include it for calculating the employees’ “current salary” for placement purposes, but not to adjust the range. In my view, absent some clearer indication of that selective intent, if it is used for one purpose, it must be used for the other as well.
I agree, as the Union contends, that the agreement did not provide for a new salary range of $1010 to $1169.58. The “new range” is $1000 to $1158. But I do not agree that the language comparing the employees’ “current salary” or “ existing rate of pay” to the “new range” means that you include the 1% general increase and any interim merit increases to determine placement but not include the increase for determining the new range. Although that is one possible interpretation, I am not persuaded that is what the parties’ meant.
In contrast, the Employer’s treatment of the 1% is internally consistent. It did not include it either in calculating the employees’ salary or the salary range for placement purposes. Rather, it compared the employees’ “current salary” and “existing rate of pay” under the old system to the new minimum and maximum, and once placement was determined, immediately adjusted the salary ranges by 1%.
The new salary schedule contained in the collective agreement comports with the Employer’s approach. It first lists the salary schedule “pre 1999 1%”, listing $1000 as the minimum and $1158 as the maximum. It also includes five steps in the progression. These amounts were then used to determine employees’ placement in the new progression, with the actual salary to be paid increased by the 1% salary adjustment to the range, effective January 1, 1999. The steps, and range, are then increased by 1.35% on January 1, 2000 and by 1.95% on January 1, 2001.
The Employer’s approach, as the Union contends, does lead to salary compression among employees with different seniority. The Union submits that it is illogical to pay experienced people the same as junior ones. Given the scope of the compression, however, it must be taken as anticipated by the parties. Looking at a number of the other groups impacted by the Letter of Understanding, the agreement led to significant wage compression among employees with different seniority dates. For example, all of the approximately 195 Environmental Officer 4’s, at any of the five levels pre-1999, earned under the $1000 new minimum. Consequently, all of them – regardless of their seniority – would be making the exact same amount on January 1, 1999 under the new system. All of them would be paid at the new minimum. Similarly, all of the Occupational Health and Safety Inspectors would be placed at the new minimum, regardless of their seniority. This also is true for employees placed in the “highest salary range.” Employees in four of the five salary steps for Environmental Officer 5’s would be placed at the new minimum of that group. This salary compression among employees with different seniority had to have been anticipated by the parties. Clearly, that was a trade-off for moving the employees into a new, substantially higher wage progression.
In contrast, the Letter of Understanding in regard to tax auditors provides for stated percentage increases, and states that “[s]teps will move by the same percentages, and employees will remain at their current step.” Thus, in relation to the Tax Auditors, the parties prevented wage compression by maintaining them at their “current step.” They did not similarly provide this for “inspectors/investigators.” Consequently, the fact that the Employer’s approach leads more senior ESA 2’s to earn the same amount as more junior ESA 2’s is not a basis to conclude that the Employer violated the Letter of Understanding. Such wage compression among employees with varying seniority was clearly anticipated by this agreement.
I also conclude that the employees did not suffer a “wage decrease” as a result of the Employer’s approach. All of the employees were provided with a wage increase.
It appears that only a small group of the ESA 2’s is adversely impacted by the Employer’s approach. Only employees at the fifth step of the former ESA 2 wage progression, earning $991.67, moved to above $1000 – the new minimum – because of the 1% general wage increase effective January 1, 1999. These same employees had been adversely impacted by the Social Contract Act. Their frustration at making the same amount as significantly less senior employees and not moving higher up on the new salary progression is understandable. But what is at issue in this case is a legal issue - whether the Employer violated the Letter of Understanding. Although the Union’s interpretation regarding placement is possible, I find, on the balance of probabilities, that the Employer did not violate the Letter of Understanding. I conclude, on the balance of probabilities, that the Employer properly compared the employees’ “current salary” under the old system to the negotiated new salary range, then applied the 1% increase.
Conclusion
Accordingly, for the above reasons, I conclude that the Employer did not violate the Letter of Understanding and the grievances must therefore be dismissed. Based on the evidence presented, the only possible exception may be Mr. DePhrofetis, who had an anniversary date on March 17, 1999. The record is a bit unclear regarding what he was paid. In my view, for the period of January 1, 1999 to March 17, 1999, he should have been paid at the $1010 per week rate. On March 17, 1999, however, he had an anniversary date and merit increase to the next level. That should have placed him at $1050.11 as of that date. If this was how he was paid, that was proper. If not, it should be corrected by the Employer. I will remain seized should there be any similar implementation issues.
Issued at Toronto this 8^th^ day of March, 2005.