GSB#2010-0045

UNION#2010-0999-0014

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)

Union

• and -

The Crown in Right of Ontario (Ministry of Revenue)

Employer

BEFORE

Deborah J.D. Leighton

Vice-Chair

FOR THE UNION

David Wright Ryder Wright Blair & Holmes LLP Barristers and Solicitors

FOR THE EMPLOYER

Lisa Compagnone Ministry of Government Services Labour Practice Branch Counsel

HEARING

July 19, 2010.

Decision

1On March 22, 2010, the union grieved that the employer had violated the collective agreement by refusing to acknowledge its obligation to certain payments due under Article 53 and 78 for the employment period of members who are accepting positions with the Canada Revenue Agency (CRA). The parties have agreed to the following statement of facts for the purposes of this litigation and without prejudice to any position they may take in any other matter.

1. The Canada Revenue Agency (“CRA”) and the Ontario Ministry of Revenue (“MOR”) entered into a “Canada-Ontario Comprehensive Integrated Tax Co-ordination Agreement” on November 9, 2009. As a result of that Agreement, CRA is assuming responsibility for various tax collection services formerly performed by MOR in relation to the Retail Sales Tax/Provincial Sales Tax.

2. In late 2009, OPSEU and the Employer had conducted information sessions for OPSEU employees who may have been affected by the transfer and provided those employees with the following documentation regarding Collective Agreement entitlements:

a. OPSEU Employee Portfolios – Appendix A

b. Rights and Entitlements of Impacted Employees – Appendix B

3. Pursuant to the Agreement discussed in paragraph 1, the CRA and MOR negotiated a Human Resources Agreement (“Original HRA”), signed on March 3, 2010 where approximately 1253 individuals who had one of the positions identified in Appendix 1 of HRA would receive job offers from the CRA for positions in the Public Service Alliance of Canada bargaining group (“PSAC”). A copy of the HRA, including related Letters of Understanding, is attached as Appendix C.

4. The Employer distributed communications for affect MOR OPSEU employees regarding the Original Agreement as follows:

a. Human Resources Agreement Questions and Answers – Appendix D

b. Human Resources Agreement (HRA): At a Glance – Appendix E

c. Job Offer Process: What’s Happening – Appendix F

5. The CRA and MOR agreed to amend HRA on June 4, 2010 (“Amended HRA”) whereby the CRA would instead offer jobs in the Professional Institute of Public Service of Canada (“PIPSC”) bargaining group to a smaller subset of the individuals who would have received offers for positions in PSAC under the Original HRA. A copy of the Amended is attached as Appendix G.

6. The Employer issued communications to affected MOR OPSEU employees regarding the Amended HRA on June 15, 2010 as attaches as Appendix H.

7. OPSEU has been communicating with its members about the transfer to CRA through its newsletter “Taxing Times” as follows:

a. January 2010 – Appendix I

b. March 2010 – Appendix J

c. April 2010 – Appendix K

8. The job offers referred to in paragraphs 3 and 5 above are taking place in tow “waves” as identified in Appendix 2 of the Amended HRA. The first wave of offer letters was issued by the CRA on June 25, 2010. Those employees have until July 26, 2010 to respond. The second wave of offer letters will be issued on December 17, 2010. Those employees will have until January 17, 2011 to respond.

9. The parties reached an agreement to allow all affected employees the ability to choose Advance Direct Assignment entitlements under Appendix 40 before receiving their job offers as discussed in OPSEU’s April 2010 Taxing Times newsletter and the subsequent Minutes of Settlement attached as Appendix L.

10. On or around May 31, 2010, Ontario Shared Services conducted an information session with the affected OPSEU employees who would be receiving an offer during the first wave of offers. A copy of the slide deck used at the information session is attached as Appendix M.

11. The job offers referred to in paragraphs 3 and 5 above are considered Appendix 18 Schedule B transfers and are not considered “good” job offers because the CRA does not recognize seniority.

12. Employees who choose to reject offers with the CRA referred to in paragraphs 3 and 5 above will be surplussed and will receive a termination payment of one week of salary for each year of continuous service.

13. It is the Employer’s position that employees who choose to accept the job offers with the CRA referred to in paragraphs 3 and 5 above who were hired prior to January 1, 2009 with one or more years of service will receive a termination payment of one week of salary for each year of continuous service up to December 31, 2008.

14. The Union has grieved a breach of Articles 53 and 78 of the Collective Agreement, in that employees who have accepted job offers with the CRA referred to in paragraphs 3 and 5 above are entitled to termination pay calculated based on their length of service up to their last day of employment with MOR.

2The parties agree that the issue before me is whether or not employees who accept jobs with the CRA have voluntarily resigned from the OPS. Since this is a case of first instance, there is no case law to guide my decision. The answer to this question involves an interpretation of several articles of the collective agreement. Article 53 of the collective agreement provides termination payments to employees when their work ends with the OPS. Section 53.4.1 states as follows:

An employee,

(a) Who has completed a minimum of one (1) year of continuous service and who ceases to be an employee because of:

(1) Death,

(2) Retirement pursuant to,

(a) Articles 8.4, 8.6, 9, 10.1, 10.2, 10.3 or 17 of the OPSEU pension plan and who is found by the OPSEU pension trust to be unable to perform his or her duties by reasons of mental or physical incapacity and who’s service is terminated in circumstances under which he or she is not entitled to a disability pension; or

(3) Dismissal for certain reasons under section 39 of the P.S.O.A., or

(4) Resignation during the surplus notice period; or

(b) who has completed a minimum of five (5) years of continuous service and who ceases to be an employee for any reason other than:

(1) Dismissal for cause under subsection 34 of the P.S.O.A., or

(2) Abandonment of position under section 42 of the P.S.O.A., or

is entitled to severance pay for continuous service from and after April 1, 1978 equal to one (1) week of salary for each year of continuous service from and after April 1, 1978.

Article 53.4.2 of the collective agreement provides:

53.4.2 Not withstanding Article 53.4.1 an employee who voluntarily resigns is only entitled to termination payments for services accrued up to December 31, 2008.

Article 78.1.2 makes the same provision as 53.4.2, but for the part time employees in the unit.

3Article 6 of Appendix 18 (Schedule B transfers) governs what the parties have referred to as a negotiated transfer of work from the Ontario Government to another employer and thus applies here to the employees whose work is being transferred to the Federal Government. Article 6.4 provides as follows:

6.4 Employees who accept a job offer in accordance with Article 6.1.1 with a receiving employer will be deemed to have resigned effective the date the commence employment with the new employer, and no other provision of the collective agreement will apply except for Article 53 or 78 (termination pay).

Article 6.6 states:

6.6. Where the salary of the job offered by the receiving employer is less than eight-five percent (85%) of the employee’s current weekly salary or if the employees’ 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 2-5 of Appendix 9. The employee must elect whether or not to accept employment with the receiving employer within three (3) days of receiving an offer. In default of election, the employee shall be deemed to have accepted the offer.

Article 6.6 is clear that the individuals affected by the transfer of the HST work to the Federal Government have a choice as to as to whether or not to accept a position with the CRA or not. However, once their positions are identified they are eliminated from the OPS. Those who choose not to transfer to the Federal Government will be declared surplus. If they are not able to find another job within the OPS, they will receive termination pay and all of their service will be recognized for the purpose of Articles 53 and 78.

4Those who choose to transfer to the CRA, in the employer’s view, are not entitled to have their service counted after December 31, 2008, because under Article 53.4.2 and Article 78.1.2 an employee who voluntarily resigns is only entitled to termination up to that date. The union’s position is that the employees being transferred to the CRA are not voluntarily resigning their positions from the OPS and therefore they should get credit for their full service up to the time they are deemed to have resigned under Article 6.4 of Appendix 18.

Union’s Submission

5Counsel for the union argued that Article 53 and 78 contemplate a true choice to resign from work that is still ongoing. He argued that employees here do not have a free choice. It is more like choosing between the least bad options, given the job is being eliminated in the OPS. He argued that Article 53.4.2 and Article 78.1.2 could not apply to someone who has no option to stay in their own job. Counsel relied on the language found in Article 6.4 that employees who choose to transfer are ‘deemed to have resigned’ from their work in the OPS. Thus, counsel argued that this is not a typical resignation and is quite different to one that is voluntary.

6Counsel noted that the provisions on negotiated transfers in Appendix 18 are new in the collective agreement and there is no case law that is right on point. He provided me with definitions of the word voluntary from Black’s Law Dictionary and Webster’s. He argued that this is no voluntary choice here in the common understanding of the word. Counsel also relied on cases relating to whether or not over time had been taken on voluntarily or not. He relied on Cooper Tool Group Limited and United Steel Workers, Local 6497, 1975 CanLII 2134 (ON LA), 10 L.A.C. (2d) 407 (1975), (O’Shea): Fire Commissioner’s Office and Newfoundland Association of Public Employees, 1994 CanLII 18682 (NL LA), 42 L.A.C. (4th) 1. In both these cases it was found that the overtime performed by bargaining members was done in a truly voluntarily basis and was not required by the employer. Therefore, there was no entitlement to overtime.

7Counsel also relied on other provisions in the collective agreement that indicated true voluntariness such as Article 20.7, the voluntary exit option. Counsel also pointed to Appendix 40, Article 3 regarding direct assignments of individuals that have been identified as surplus. Article 3 provides where individual has not yet received a layoff notice, they can be deemed to have received a layoff notice for the purpose of direct assignment, if they choose to be considered for such assignment. And finally, counsel pointed to Article 5, of Appendix 18 (Schedule A) where individuals are given a choice as to whether or not they wish to be included in a request for proposal or RFP. In counsel submission these provisions stand in contrast to Article 6.4 where an individual is deemed to have resigned the day before beginning employment with the Federal Government.

8In summary counsel argued that I ought to give meaning to the language that has been used, that is, that the transferred employees are deemed to have resigned. He urged me to find that if the parties had intended that the resignations were to be considered as voluntary, they would have used the words voluntary resignation.

Employer’s Submission

9Counsel for the employer argued that the employees who accept positions with the CRA have voluntarily resigned from the OPS. The effective date of this resignation is the day before they start work with the Federal Government. Counsel for the employer argued that clearly employees who accept a position with another employer have voluntarily resigned. Given the resignation is voluntary, these employees are entitled to pay for termination up to December 31, 2008. Thus in counsel’s submission, the bargaining unit members transferring to a job with the Federal Government do not receive any pay after December 31, 2008 to the day they leave the OPS.

10Counsel for the employer argued that this board looks to the substance of what has occurred and not what an employer has called it. Here one must look at the subjective and objective intent of the employees. The resignations of individuals taking a job with the CRA may be reluctant but they are never the less voluntary.

11Counsel argued further that the resignation here comes with a transfer to another employer. The language in this case is new, but counsel argued there are many cases on voluntary resignation. The difficulty of the resignation does not mean that it is not voluntary. So counsel urged me not to look at the dictionary definitions as tendered by the union, but to look to the case law on resignations. Counsel relied on the Sachigo case, infra, where the issue before the adjudicator was whether or not the teacher had quit her employment with the board and it could treat her actions as a resignation. Counsel relied on a quotation from Professor Palmer in Collection Agreement Arbitration in Canada, cited in Sachigo:

Central to an understanding of the law in this area is an awareness of the ‘right to quit’ employment is personal to the employee and that there must be ‘clear and inequitable’ facts to support a conclusion that this right has been exercised by the employee involved. Consequently, arbitrators have developed the view that there is both the subjective and an objective element to a ‘quit’: first, an employee must form an intent to quit his employment; and, second, he must carry out an act inconsistent with his further employment.

Counsel argued that in this case employees taking employment with the Federal Government is evidence of a quit or resignation. Counsel argued further that a threat or inducement from an employer may negate the voluntariness of a resignation. However, in this case there is no evidence to support any undue influence on employees. The decision must be independent and it was even if it was an unpleasant choice. In the facts before me, it is clear that people are given the option to choose to go work for the CRA or not.

12Counsel argued further that the documentation before me shows that the employees had plenty of information on the job offers and time to decide whether they wanted to take the job with the CRA or not. Once an offer was made, employees were given a month to decide whether or not to take the job. Counsel noted that the decision of employees to accept the job offer was voluntary and what is deemed is the date of the resignation. Those that do not accept a job with the CRA are entitled to the provisions under Article 20 of the collective agreement. Counsel agreed with the union that these individuals would be declared surplus. They might perhaps be matched to a job or if not, they would be terminated.

13Counsel for the employer submitted that the provisions noted by the union on other Articles involving voluntary choice are not helpful to my decision here. She noted that the provisions identified by the union involve completely different circumstances and therefore are of no assistance in deciding whether or not this is a voluntary resignation or not in all circumstances. Counsel for the employer addressed the argument of the union that the employees did not have a free choice in the circumstances here. She argued that the case law addresses the “reluctant resignation” and that even a reluctant resignation can be found to be a voluntary quit. She argued that thus these individuals should not be given severance pay for 2009 until the date they are deemed to have resigned from the OPS. If that is an injustice, she argued, it is outside the board’s jurisdiction. The issue before me is whether or not the decision to resign was voluntary and therefore caught by Article by 53 and 78 respectively. The parties negotiated the results of a voluntary resignation and this Article first appeared in the collective agreement in 2008.

14Counsel for the employer relied on the following cases in support of her submission: Transalta Utilities Corp. and Trans Employees’ Association (1998), 1998 CanLII 30123 (AB GAA), 77 L.A.C.(4th) 129; OPSEU and Ministry of Agriculture, Food, and Rural Affairs (2008), GSB 2007-1045 (Briggs); OPSEU and Ministry of Consumer and Business Services (2003), GSB 2001-0884 (Herlich); OPSEU and Ministry of the Attorney General (2008), GSB 1992- 1290 (Waters); Anchor Cap and Closure Corp of Canada v. United Electrical Radio and Machine Workers of America, Local 812 (1949) 1 L.A.C. 222 (Finkelman); Sachigo Lake Band and Vansickle (1996) C.L.A.D. 6; Westfair Food Limited and UFCW, Local 832 (2001) M.G.A.D 11; Community Life Care Inc. and UFCW, Local 175 (2008) 174 L.A.C. (4th) 64 (Bendel).

Union’s Submission In Reply

15Counsel for the union argued that the fundamental question before me is who severed the employment relationship. Counsel argued that it is clear that the employer is the one who severed the relationship. The retail sales taxes jobs are being eliminated and therefore there is no further employment in the OPS for the effected individuals. The employees had two choices. The first was to go to the CRA; the second was to be declared surplus. But, in the second choice, those who choose surplus will get all their severance. Counsel argued that the issue before me is not whether there has been a resignation or not, as in the cases put before me by the employer. The case law put forward by the employer deals with whether or not an individual has truly quit a job or not. There is no issue before me as to whether these individuals have quit. Thus these cases are of no assistance in deciding the issue of whether the resignation was voluntary. The issue in the cases of whether or not somebody has quit or not where a job still exists usually involves an analysis of whether or not the individual was forced by the employer to resign. Counsel argued further that given the employer severed the employment relationship by transferring the work to another employer there can be no voluntary resignation.

16Counsel for the union also argued that the parties made a distinction here. They could have called it a deemed voluntary resignation. But they did not. The language they used was ‘deemed resignation’.

17In concluding, counsel agreed with the submission of the employer that it is not the label that the employer gives something but what actually occurred that is important. The employer here made a decision to sever employment, the employees had two options: to take a job with the CRA or to be declared surplus. Counsel argued that there should not be any difference in treatment as to termination or severance pay between the two groups of people. He argued that Article 53.4.2 and 78.1.2 mean that a person who had the option of staying in a job, but voluntarily chooses to resign, should be covered by the cap in termination pay that is up to December 31, 2008. That is simply not the case before me in counsel’s submission. Thus, counsel urged me to find that the individuals who chose to go with the CRA did not voluntarily resign for the purposes of applying Article 53.4.2 and 78.1.2.

Decision

18Having carefully considered the submissions of the parties, I have decided that the union must prevail. I am persuaded that the meaning of Articles 53.4.2 and 78.1.2 which specifically cap termination payments to employees, who voluntarily resign from an existing job in the OPS, is not applicable in the case of employees whose work is transferred to another employer. I make this decision for several reasons. One is that the language used in the Appendix 18, Article 6.4 could have specified that the resignation for these employees is voluntary. However, it did not. It uses a word often used in law which suggests that what occurred will be ‘considered’ or ‘treated’ as a resignation. This language is inconsistent with the usual sense or meaning of a voluntary resignation.

19I am persuaded that the real question here is, who decided to sever the employment relationship as argued by the union. And of course the answer is that the employer decided to transfer the work and to sever the employment relationship. The employees had some choice. They could decide to transfer or they could take their chances being declared surplus. However, there was no choice about staying in their old jobs. There was no question that their jobs were gone. Again, this supports a finding that the resignations are not voluntary. This interpretation also has the effect of treating both groups of employees equally while in the OPS. I am also convinced that if the employer and the union intended to treat the two groups here differently for the purposes of termination pay they would have included clear language in Article 6.4 of Appendix 18 to do so. And they did not.

20I have carefully considered the case law presented by the employer on resignations. Given the nature of the question before me I did not find that the cases helped in my deliberations. The case law put before me raised issues as to whether a grievor had quit work or not. This is not the issue before me. There is no question that the employees who choose to be transferred are resigning. The only question is whether it is a voluntary resignation. The employer argued that a reluctant resignation is nevertheless a resignation. I agree, but the language of Articles 53.4.2 and 78.1.2 specifically use the word ‘voluntary’. Anyone who ‘voluntarily’ resigns from their job in the OPS has termination pay capped. It does not say that anyone who resigns from a job in the OPS has their pay capped. Voluntary must have been included for a reason, otherwise it is superfluous.

21Both counsel agreed that this board has held consistently that it will look at the substance of what has occurred and not the label that the employer puts on it. Considering all the facts in this case I am persuaded that the resignations of the employees are not voluntary. Putting the label of voluntary resignation on the choice to transfer to the CRA, when Article 6.4 calls it a deemed resignation is not supportable.

22For all the reasons noted above, I hereby grant the grievance. I shall remain seized of any issues which may arise upon implementation of the award.