GSB#2011-3477

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Association of Management, Administrative and Professional Crown Employees of Ontario (Quadrini)

Association

• and -

The Crown in Right of Ontario (Ministry of Finance)

Employer

BEFORE

Bram Herlich

Vice-Chair

FOR THE UNION

Marisa Pollock Sack Goldblatt Mitchell LLP Counsel

Nadine Blum Sack Goldblatt Mitchell LLP Counsel

FOR THE EMPLOYER

Roslyn Baichoo Treasury Board Secretariat Legal Services Branch Counsel

HEARING

February 2, 2015

Decision

1There were ongoing settlement discussions in this matter. The employer asserts and asks that I find that those discussions culminated in a binding settlement of the dispute (as grievances are described by these parties). The union resists any such conclusion. The parties asked me to determine the question of whether or not there has been a settlement on the basis of the following agreed facts (including the documents referred to therein – I have not reproduced those documents but will refer to and set them out, to the extent I have found necessary):

The Association of Management, Administrative and Professional Crown Employees of Ontario (“AMAPCEO”) (Quadrini) v. The Crown in Right of Ontario (Ministry of Finance) (the “Employer”) (GSB File #2011-3477)

Agreed Statement of Facts

1. On November 25, 2011, AMAPCEO filed a dispute on behalf of the Complainant, Rudy Quadrini, concerning, among other things, the Employer’s surplussing and direct assignment of the Complainant in 2011. [Tab 1]

2. AMAPCEO referred the dispute to arbitration.

3. On November 28, 2013, the parties engaged in settlement discussions at the Grievance Settlement Board. No agreement was reached that day.

4. A hearing date was scheduled for the next day, November 29, 2013, however the parties agreed to adjourn the date and continue settlement discussions, and to schedule another hearing date for April 2014, in case settlement discussions were not successful.

5. The parties continued to engage in settlement discussions, with AMAPCEO and the Employer trading proposals back and forth through legal counsel.

6. On the scheduled April 17, 2014 hearing date, the parties once again engaged in settlement discussions at the Grievance Settlement Board. No agreement was reached, and the parties agreed to schedule four hearing dates.

7. However, the parties continued to engage in settlement discussions, trading verbal proposals through legal counsel.

8. On May 2, 2014, AMAPCEO counsel advised Employer counsel that the 99,600 per annum that the employer had proposed as salary going forward was acceptable. In addition, AMAPCEO proposed a lump sum of $6, 000.

9. On June 9, 2014, Employer counsel spoke to AMAPCEO counsel and conveyed a counter offer to settle the Dispute by raising Mr. Quadrini’s salary to $99,600 per annum, and paying him a lump sum of $3,000. No other terms of the agreement were discussed at that time, or prior to then.

10. On July 3, 2014, AMAPCEO counsel communicated to Employer counsel via email, stating that “AMAPCEO and the complainant accept the Employer’s most recent counter offer” [Tab 2].

11. Attached to the July 3, 2014 email was a copy of unsigned, draft Minutes of Settlement [Tab 3], which AMAPCEO counsel had drafted.

12. The draft Minutes of Settlement included “whereas” clauses, an agreement that the Complainant had been fairly represented by AMAPCEO, in addition to five (5) clauses that provided for the following:

• Adjustment of the Complainant’s salary to Level 6 ($99,600/annum);

• $3,000 lump sum payment, less statutory reductions;

• That the Minutes of Settlement were “without prejudice and without precedent”;

• The withdrawal of the Dispute; and

• That Vice-Chair Bram Herlich would remain seized in respect of any matter arising from the Minutes of Settlement.

13. Other than the terms respecting the adjustment to the Complainant’s salary and the value of the lump sum payment, none of the other terms that AMAPCEO counsel included in the draft Minutes of Settlement had been previously (or since then) discussed between Employer counsel and AMAPCEO counsel.

14. On July 10, 2014, Employer counsel sent an email [Tab 4] to AMAPCEO counsel attaching an “amended version of the MOS”.

15. The Employer’s revised Minutes of Settlement contained additional and amended “whereas clauses” [see Tab 5] as well as three additional clauses that provided:

• That the settlement did not constitute any admission of liability or wrongdoing;

• A detailed and comprehensive waiver of all claims relating to the Employer’s decision to declare the Complainant’s position surplus; and

• That the terms of the agreement would be confidential.

16. On August 12, 2014, AMAPCEO counsel left a voicemail for Employer counsel indicating that the settlement had run into some difficulties.

17. On August 14, 2014, AMAPCEO counsel spoke to Employer counsel indicating that the complainant wanted his salary adjusted to $104,290, not to $99,600.

18. Counsel communicated in the interim and on September 18, 2014, Employer counsel emailed AMAPCEO counsel asking for an update and AMAPCEO counsel responded that he would follow up with AMAPCEO. [Tab 6]

19. On September 23, 2014, AMAPCEO counsel left a voicemail for Employer counsel indicating that the grievor “still is not in agreement with what we thought was the agreement” and that the grievor “was arranging to speak with the Director at AMAPCEO”.

20. On November 18, 2014, AMAPCEO counsel told Employer counsel that the Complainant did not agree to the settlement.

2These agreed facts can be simplified for the current purposes as follows. The parties engaged in settlement discussions, the singular focus of which was on monetary payments to the grievor (by way of a salary adjustment and the payment of a lump sum). Ultimately, on July 3, 2014, AMAPCEO counsel advised employer counsel that AMAPCEO and the complainant accepted the employer’s most recent counter offer, which consisted of a salary adjustment and a lump sum payment. Attached to the email so notifying the employer, were draft minutes of settlement (“MOS”), which incorporated the monetary terms the parties appeared to have agreed to.

3The terms of this draft were simple and economical, consisting of five paragraphs. The first two dealt with the salary adjustment and the lump sum payment respectively. The other three paragraphs provided that the settlement was without prejudice and precedent; that the dispute was withdrawn; and that I was to remain seized. The employer was invited to advise of any required modifications or, alternatively, to sign the minutes.

4The employer did not sign the minutes. Rather it prepared an amended version of the MOS. The changes included a number of additions and modifications to the recitals. It also added new terms to the draft the union had prepared. These included a term that the settlement did not constitute an admission or concession of liability or wrongdoing on the part of the parties.

5It also included a term, referred to by employer counsel as a “Cadillac” release clause, which reads as follows:

This Memorandum of Settlement constitutes full and final settlement of any and all claims, complaints, disputes, grievances or actions whatsoever that the Association and the Complainant has or may have had against the Employer, its representatives, present employees and officials whether under a collective agreement, statute, regulation policy, including but not limited to the Ontario Human Rights Code, the Employment Standards Act, the Crown Employees Collective Bargaining Act and the Public Service of Ontario Act and its regulations, or contract as a result of or arising out of the Employer’s decision to declare the Complainant’s position surplus and any and all acts or omissions on the part of the Employer, its representatives, present employees, and officials in relation to the job security provisions as found in Article 27 of the Collective Agreement, as they apply to the Complainant by reason of the aforementioned surplus including but not limited to any acts or omissions in relation to the provision of the direct assignment into a permanent vacancy as provided for in Article 27.8 and the provision of the bumping opportunity as provided for in Article 27.9. The Complainant and the Association hereby forever releases the Employer, its representatives, present employees, and officials from all such claims, complaints, disputes, grievances and actions, in respect of the above matters. Further, the Complainant and the Association agree that the factual circumstances of this dispute will not form part of the subject matter of any claim, complaint, dispute, grievance or action.

6Finally, the employer’s revised document also included the following confidentiality clause:

The terms and conditions of this agreement are confidential between the Parties and will not be disclosed to any other person, not including the Association’s head office, or the Employee’s immediate family or the Employer as required to effect the terms of the settlement, unless such disclosure is required by law.

7AMAPCEO did not sign the revised document and about a month after receiving it, AMAPCEO counsel advised that the settlement had run into difficulties, adding two days later that the Complainant wanted a higher monetary settlement. The proposed settlement document was not signed and discussions between the parties did not continue.

Employer position

8The employer asks me to find, on the basis of the foregoing facts, that a settlement had been arrived at between the parties.

9The employer argues that, apart from the indication that the settlement had “run into difficulties”, the only points ever specifically identified by the union as problematic were the monetary terms it had previously accepted. No explicit objection was ever mounted or articulated in respect of the new provisions the employer had added to draft MOS.

10In this factual context, the employer asserts that all that has really happened is that the complainant has had second thoughts or suffered from “buyer’s remorse” after the settlement was agreed to. The complainant and the union ought not to be permitted to resile from the settlement.

11The substance of the complaint had been resolved when the parties agreed to monetary terms. The terms the employer added to the draft MOS did not in any fashion go to the substance of the deal between the parties. And the union’s failure from then until the hearing in this case to raise any issue or concern with the “new” terms merely confirms their innocuous nature. They are not substantive material terms that either do or were perceived as going to the heart of the settlement.

12Among the authorities pointed to by the employer in support of its position were: OPSEU (Coelho) and Ministry of Children and Youth Services, GSB No. 2011-2422 et. al, October 18, 2013 (Lynk); OPSEU (Corbiere) and Ministry of Community and Social Services, GSB No. 2011-3255, August 13, 2013 (Dissanayake); and OPSEU (Rolfe) and Ministry of Community and Social Services, GSB No. 2003-2769 et. al.

AMAPCEO position

13The union, of course, sees matters differently. It does not dispute that, as of July 3, 2014, there was agreement on the monetary terms the parties had been discussing to that point. However, when the employer, rather than simply signing the union’s proffered MOS, elected to add new, not previously discussed, terms to the settlement, all bets were off. In advancing its argument, the union asks, more than rhetorically: “If there was a settlement, what is it?” Does it incorporate the new terms added by the employer, terms the parties clearly never agreed to? Is it the MOS that the union prepared but that the employer elected not to sign? Or is it a settlement built upon the monetary terms with further as yet unknown additional terms to either be negotiated by the parties or imposed by me, effectively, as an interest arbitrator. None of these alternatives is appropriate or satisfactory in the circumstances, a fact that merely highlights the conclusion that there has not yet been any final settlement in this case.

14Among the cases pointed to by the union were: AMAPCEO (Globerman) and Ministry of Health and Long Term Care, 2003 CanLII 52900 (Briggs); AMAPCEO (Kent) and Ministry of Community Safety and Correctional Services, 2012 CanLII 50009 (Dissanayake); and OPSEU (Corbiere) and Ministry of Community and Social Services, 2013 CanLII 57002 (Dissanayake).

Decision

15There can be no overstating the importance of grievance settlements in labour relations. They are the functional backbone of the labour relations rights dispute processes. Indeed, recognizing their value, the Labour Relations Act makes written settlements enforceable. It provides (in section 48(15)):

An arbitrator or the chair of an arbitration board, as the case may be, may enforce the written settlement of a grievance.

16It is curious perhaps that this provision of the Act contemplates only written settlements. Typically, both as a general matter and in respect of the instant parties, settlements are reduced to writing and signed, thus avoiding any litigation about whether there is a binding settlement. Unfortunately, that is not the case here – indeed, it is the parties’ failure to execute a written MOS that gives rise to the instant proceedings. None of the above, however, has prevented arbitrators from finding, in the appropriate circumstances, that a grievance has been settled even where its terms have not been reduced to writing and signed. It is important to bear in mind that the issue in the present case is whether there has been a settlement. Neither of the parties sought, in any way, to challenge the generally accepted importance and sanctity of settlements.

17In the most recent of the cases referred to by the parties (Coelho, supra), Vice-Chair Lynk enumerated (at p. 13) the following principles to apply in a determination of whether a binding settlement has crystallized:

1. The classical principles of contract law apply: offer, acceptance and consideration. The key determinant is whether the parties have reached a common agreement, a meeting of minds, on all of the substantial issues on the table. An agreement is reached at the moment when all of the substantive matters in dispute have been resolved, there is nothing substantive left to be negotiated, and the parties have intended to achieve resolution of the matter on these terms. The test is objective.

2. The representatives of the parties reaching the agreement must have the authority to bind the parties.

3. The fact that some secondary details might still require elaboration would not be usually sufficient to negate the crystallization of a binding agreement, unless this was an express condition agreed upon during the negotiations.

4. The parties can be bound by oral commitments, as long as the evidence demonstrates that they have unconditionally agreed to settle the substantial issues between them. Reducing the settlement to writing is a procedural, and not an essential, feature of an agreement. Signatures on a document are usually conclusive that an agreement has been reached, but a binding agreement does not necessarily depend on the presence of signatures.

5. The party seeking to rely upon the agreement must establish its existence on the balance of probabilities, based on clear and cogent evidence of the words and conduct of the parties.

[citations omitted]

18Applying those principles to that case, Vice-Chair Lynk was able to conclude, on the facts before him, that “the parties had reached a meeting of the minds on all of the substantive issues between them”. He was also able to observe that the usual terms and conditions that accompany an agreement to settle a grievance, such as “waivers and the like” were uncontroversial and could not be considered as playing any part of the core agreement in the particular process before him.

19Based, of course, on the specific facts before them, arbitrators have come to differing conclusions about the existence of a settlement in the absence of a signed document. In Corbiere (supra), the parties had been engaged in mediation efforts under the auspices of the Vice-Chair. The grievor discovered that his new employer would not grant him a leave of absence to take advantage of the temporary contract the parties were discussing in the settlement process. Unfortunately for the grievor, however, this discovery was made just shortly after the employer, through the Vice-Chair, had communicated its acceptance of the union’s last proposal. The parties were held to be bound by the terms of their settlement.

20In Rolfe, supra, the parties, through counsel, had come to an oral agreement on all essential terms of the settlement. The employer prepared and forwarded an MOS incorporating the terms. The grievor then decided that she could not enter into the settlement. Various reasons for this apparent change of heart were offered by the grievor in a subsequent letter to her counsel and in her testimony before the Board. Many of these had little apparent connection to the issues at hand in the settlement. The Board concluded that there had been a binding settlement.

21It is interesting to note, for our purposes, that one of the concerns raised by the grievor was the “heavy duty protection clause”, a reference to a release clause drafted by the employer, a clause which would have required the grievor to relinquish rights under statutes other than those which governed the proceedings. The Vice-Chair noted, however, that the discussions between counsel leading up to the settlement had specifically contemplated the inclusion of both a release clause and a confidentiality clause.

22In my view, among the cases cited to me, the one which is most apposite to the facts at hand is the decision in Kent, supra. In that case, the parties, again with the assistance of the Vice-Chair, had resolved all outstanding issues, save one, at mediation. The employer insisted on the inclusion of a “no-application” clause (essentially an undertaking that the grievor would not apply for re-employment in the future); the union was equal in its insistence that no such term be included. The mediation concluded with no final agreement. The union subsequently forwarded a proposed MOS (signed by the grievor) that contained all of the provisions the parties had agreed to, but no “no-application” clause. Employer counsel, after seeking instructions, advised that the employer would not agree to the settlement and was prepared to go forward with the litigation. When that litigation commenced, the union, having only very lately adopted the position that it was prepared to agree to the inclusion of the “no-application” clause, asked the Board to find that the matter had been settled. The Board declined.

23While the facts of this case certainly differ from those before me (and the shoes are clearly on different feet), I find the Board’s conclusion regarding the status of the employer’s last proposal (the one the union was seeking to have the Board find constituted the parties’ settlement) of value to the current case. Essentially, the Board concluded that once the employer advised the union (in response to the latter’s proposal) that it no longer wished to settle the matter, there was no longer any offer from the employer available for the union’s acceptance. As the Board concluded (at para. 14):

…while the bulk of the terms of a settlement had been reached, the dispute itself was not resolved because of the parties’ disagreement on the “no-application” clause. Unfortunately, by the time the Association decided to accept the clause, the offer had been revoked.

24This is certainly analogous to the facts in the instant case. The union forwarded a written MOS to the employer for review and signature. Had the employer opted to sign that MOS, there is little doubt that a binding settlement would have been achieved, whatever “second thoughts” the complainant may have subsequently had. However, rather than signing the MOS, the employer opted to redraft it and to include new terms the parties had not previously discussed. In the face of that response the union was entitled to table a fresh response (perhaps even one that adjusted the monetary terms in consideration of the inclusion of the new terms proposed by the employer) or alternatively, as it ultimately did, to simply reject the proposal. In either case, there was (barring any explicit acceptance by the union) no final settlement once the employer tabled its new MOS.

25The difficulties associated with finding the facts in this case disclose a binding settlement are highlighted by the potential answers to the question begged by any such conclusion: what are the terms of the settlement? They cannot be the union’s original MOS, which the employer rejected and never sought to rehabilitate (even if it could); they cannot be the employer’s MOS, which includes terms never discussed, let alone agreed to, by the parties. If it is restricted to the monetary terms, it appears to be incomplete (certainly when viewed through the prism of the proposed MOS documents). And my task, of course, is to find whether or not there is a settlement, not to forge one.

26Neither have I ignored the employer’s urging that I treat the new terms it proposed as merely the “modifications” the union had invited. I am asked to conclude that the new proposed terms were neither controversial nor did they constitute essential terms of the agreement. Rather, the proposed terms represent the “norm” and did not go to the substance of the agreement. The employer also argued that the union’s failure to identify the new terms, either in the discussions between the parties at the time or in the hearing before me, as controversial or problematic should support the conclusion that what transpired here was nothing more than the result of the complainant’s “buyer’s remorse” and an inappropriate effort to negotiate more favourable monetary terms after the settlement had been concluded.

27First, it goes without saying, that it is not open to any party to resile from an effective settlement. The issue before me, however, is whether or not the asserted settlement between the parties ever crystallized.

28I am unable to accept the employer’s characterization of the “new terms” as mere modifications, dotting the “i”s and crossing the “t”s, on a concluded settlement for the purposes of drafting a document recording the parties’ agreement. Even if I were to accept the urged characterization in respect of the additions to the recitals and the inclusion of a term negativing any admissions of liability, I am unable to arrive at any such conclusion with respect to either the release clause or the confidentiality clause.

29I agree with the employer that these types of clauses are not unusual in settlements between these parties. That, however, does not lead immutably to the conclusion that they are terms without significance or substance. The finding in Coelho that the “waivers and the like” at issue in that case were not controversial was a finding based on the evidence before the Board in that case. On the evidence before me, I am unable to conclude that the release and confidentiality clauses proposed by the employer were not controversial or were not substantive parts of the settlement proposed.

30The release clause, which the employer described as of the “Cadillac” variety, would, among other things, have required the complainant to relinquish rights under a variety of statutes. As far as the confidentiality clause is concerned, one need not look much further than recent newspaper reports to see just how significant such a provision can be in an arbitration settlement.

31But perhaps the most telling fact related to this issue is a simple one. It lies in the message communicated to the union when the employer declined to sign the MOS that the former had prepared. Unlike in the Rolfe case, there had been no prior discussion whatsoever between the parties, let alone any agreement, regarding the inclusion of such clauses. However, in declining to sign the union MOS and preparing a revised MOS with those new terms, the message to the union was that the employer was unwilling to sign an MOS that did not include the new terms. In that context, I am unable to conclude that these new terms were unimportant or insignificant and did not form a substantive part of the proposed settlement. And, in that context, the union was entitled, as it did, to reject the proposal leaving the parties without any crystallized binding settlement.

32Having regard to all of the foregoing, I am not persuaded that there has been a binding settlement in this matter and the employer’s request that I so find must therefore be dismissed.