GSB#2020-0008

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 (Paranuik)

Association

• and -

The Crown in Right of Ontario (Ministry of Education)

Employer

BEFORE

Diane Gee

Arbitrator

FOR THE UNION

Christine Davies Goldblatt Partners LLP Counsel

FOR THE EMPLOYER

Braden MacLean Treasury Board Secretariat Legal Services Branch Counsel

HEARING

April 22, 2021 and May 5, 2021

Decision

1This matter is a Dispute filed by the Association on behalf of Kyle Paranuik (the “Complainant”) in which it is alleged the Employer is in violation of the Collective Agreement for failing to honour the salary offered to the Complainant, and accepted by him, on July 6, 2017. The Dispute was filed on February 28, 2020.

The Issue

2The Association submits that the salary offered to the Complainant on July 6, 2017 was consistent with Article 19.1.2 of the Collective Agreement and was accepted by the Complainant. It was not, thereafter, open to the Employer to revoke the offer. The Association submits the second offer of July 7, 2017, with a lower salary, should be considered a nullity. The Employer argues it was the manager’s intention to offer the Complainant a 3% salary increase, and not the 11% set out in the first offer letter. The individual in Recruitment Services who prepared the offer letter knew management wanted to offer 3% and made an honest mistake when preparing the letter. The Employer submits the salary set out in the first offer was the result of an honest mistake that the Employer is permitted to rectify.

3For the reasons set out below, I find the Employer was entitled to rectify its error and I dismiss the Dispute. My determination that the Employer was entitled to rectify its error renders it unnecessary for me to deal with a number of additional issues argued by the parties and, accordingly, I have not set out herein the facts and submissions made in respect of such issues.

The Facts

4There is no dispute as to the material facts. The Complainant started working in the OPS in December 2016 as a Finance Officer earning $70,000 a year. In May 2017 he competed successfully for the position of Senior Analyst, Finance and Audit in the Association bargaining unit. His manager in the Finance Officer position was Patricia Del Riccio. His manager in the Senior Analyst, Finance and Audit position was Marjorie Tang. At the time the Complainant was awarded the Senior Analyst, Finance and Audit position, Tang and Del Riccio were in the process of filling a number of other positions as well.

5Article 19.1.2 of the Association Collective Agreement provides as follows:

ARTICLE 19 – PAY ADMINISTRATION FOR REGULAR EMPLOYEES

19.1 Pay Administration on Promotion

19.1.2 An employee who is promoted shall receive a promotional increase of at least three percent (3%); however, in no case shall the resulting salary be less than the minimum or greater than the maximum of the classification of the position to which he or she is assigned.

6The salary range for the position of Senior Analyst, Finance and Audit at the time was $69,496.00 - $102,408.00 a year.

7The Complainant was verbally offered the position in late June 2017 by Tang. Tang and Del Riccio thereafter worked together on getting offer packages prepared for the individuals awarded new positions. By email dated June 29, 2017, Del Riccio contacted Kamal Bhargava, in Recruitment Services, advising her of the three individuals, including the Complainant, who were being offered a Senior Analyst, Finance and Audit position. In respect of the grievor, Del Riccio wrote: “Kyle Paranuik – Effective July 10, 2017 (he is currently on contract in an opseu position. We are assuming he is entitled to 3 percent increase. Correct?).” Bhargava responded by email dated July 5, 2017 stating “Yes, Kyle is eligible for 3%.” Attached to the email were the hiring documents including the first offer letter stating the Complainant’s salary to be $79,090. The pay difference between what the Complainant earned in his Finance Officer position, and what was set out in the offer letter, represented an 11% pay increase.

8Each of Tang, Del Riccio and Bhargava were called as witnesses by the Employer. They gave their evidence in a straightforward manner to the best of their abilities given the passage of time. The events as described by Tang, Del Riccio and Bhargava are probable. I find all three of them to be credible.

9Bhargava testified she understood that management wanted to offer the Complainant a 3% increase and not an 11% increase and that no one from management instructed her to offer an 11% increase. Bhargava intended to insert a salary figure into the offer letter that represented a 3% increase. She cannot recall how the mistake was made but testifed it was a genuine mistake. The next day, when the error was pointed out, she prepared the second offer letter and forwarded it to management.

10Del Riccio’s practice was to always pay 3% in the case of a promotion, and it was her intention to offer the Complainant a pay increase of 3%. Del Riccio stated that, in order to offer more than 3% she would need to get approval, which she had not. The calculation of the 3% increase was complicated by the fact that collective bargaining had concluded, and multiple impacts were causing changes to the salary grid. When Del Riccio first saw the $79,090 number she thought it reflected a 3% increase taking into account the changes to the salary grid. Del Riccio trusted Recruitment Services to provide the correct number.

11Tang was in the manager position on an acting basis, and this was the first time she had been involved in hiring. She relied on Recruitment Services to prepare the offer letter. It was her intention to offer the Complainant a 3% increase. Based on her prior experience of being promoted in the Association bargaining unit she understood she could only offer a 3% increase. She believed Recruitment Services to have taken into account complexities resulting from the changes being made to the salary grid and to have correctly calculated the 3% increase.

12Based on the salary set out by Recruitment Services in the offer letter, Del Riccio, by way of writing the amount on a sticky note and handing it to him, told the Complainant he would be paid $79,000 in his new position. On July 6, 2017, Tang gave the Complainant the offer letter provided to Del Riccio by Bhargava in which it is stated his starting salary would be $79,090 a year. The letter states that the Complainant’s first day of work in his new position would be July 10, 2017, however, he started doing work associated with his new role as early as July 5, 2017. The Complainant signed the offer, accepting the terms as outlined in the letter, on July 6, 2017 and returned it to Tang. The Complainant had no reason to believe there was anything wrong with the salary he had been offered. He was happy with the raise and thought it was reasonable, but, in his words “not blown away.”

13After the Complainant signed the first offer letter, Tang received the paperwork for another position she was filling. She understood there were some complexities in how Recruitment Services calculated the salary but wanted to understand how the calculation was done. When her assistant contacted Recruitment Services and asked how the calculation was done, the error in the Complainant’s offer letter was discovered.

14On July 7, 2017 at 12:25, Del Ricco emailed Craig Gibbons in Recruitment Services, copying Bhargava, stating it had been noticed that the salary level in the Complainant’s offer letter was incorrect and asking how the $79K salary had been calculated. Gibbons emailed back at 12:34 stating the salary should have been $73,458 per year and attached updated documents. Tang and Del Ricco scheduled a meeting with the Complainant that same day for 2:00 p.m.

15At the July 7, 2017, 2:00 p.m. meeting, the Complainant was given a second letter, identical to the first one except for the date and the starting salary. The second letter stated that the Complainant’s starting salary would be $73,458 representing a 3.3% pay increase. The Complainant was told they were extremely sorry as there had been a human error. He was told the salary stated in the first offer was a mistake and he had to sign the second offer as, if he did not sign, he would be paid at the lower rate regardless and his not signing would create a problem. The Complainant had the feeling the first offer was completely invalid, maybe not permitted under the collective agreement, and that he had no option but to sign the second offer, so he signed it at the meeting. The Complainant was disappointed. He did not raise the issue at that time as he did not think there was anything to raise. Based on what he was told by Tang and Del Riccio at the July 7, 2017 meeting, he understood the Collective Agreement said that you get a 3% raise in the event of a promotion.

Submissions of the Parties

16The Association submits that the salary contained within the first offer letter was consistent with the Collective Agreement and, once it was accepted by the Complainant, it was not open to the Employer to thereafter revoke or modify the offer. The Association relies on the facts of this matter and argues that they are on all fours with the facts in Association of Management, Administrative and Professional Crown Employees of Ontario (Robins) v. Ontario (Community and Social Services), 2017 CanLII 85186 (ON GSB) (hereinafter “Robins”).

17The Association submits the evidence establishes that the Complainant was a fixed term employee in the OPSEU bargaining unit who applied for and was offered a position in the Association bargaining unit. He expected to receive a raise and when he was told he would be paid $79,090 he was happy but not blown away. The salary offered was within the salary range for the position. Nothing precluded the Employer from offering the Complainant the salary set out in the first offer letter. Increases of more than 3% can be offered, with higher increases requiring higher levels of approval.

18The Association submits Article 19.1.2 of the Collective Agreement provides for an increase of no less than 3% in the case of a promotion, however, it is not a ceiling and relies on Robins, supra, in support. Increases up to the top of the salary range can be offered. This is not a case of people who cannot do math, the people involved are financial people. When Tang and Del Riccio met with the Complainant on July 7, 2017, they told him he had no choice in the matter; if he did not sign the second offer, the money would be clawed back anyway. The Complainant believed what he was told and signed the second offer letter.

19The Association submits the facts of this matter are on all fours with the facts in Robins in which it was determined that the Employer could not revoke its first offer after it had been accepted by Robins and replace it with another with a lower salary. The Association submits Robins was in an excluded position and was then hired into a position in the Association bargaining unit. By way of offer letter dated September 10, 2015, Robins was offered and accepted the position of Learning and Development Coordinator (“LDC”) in MCSS at a salary of $68,000. The next day, the Employer gave Robins a new offer letter reducing her salary to $63,482. The higher salary was offered by a manager who intended to offer the higher salary and thought she had the authority to do so. After the first offer was signed by Robins, the manager was told her authority was limited to offering a 3% increase based off of Robins most recent OPS salary, the Director’s approval was required to give a 5% increase, and the Deputy Minister’s approval was required to go higher. The Director gave their approval for a 5% increase, but the matter was not remitted to the Deputy Minister. Hence, the second offer given to Robins represented a 5% increase over her last OPS salary.

20In Robins, the employer argued that there can only be one contract and that contract is the collective agreement. The arbitrator, citing the Supreme Court of Canada decision in McGavin Toastmaster Ltd. v. Ainscough, 1975 CarswellBC 136, rejected the Employer’s submission on the basis that, at the hiring stage, when someone is coming into the collective agreement, there is a narrow window of time during which an individual relationship between employee and employer exists. Applying contract principles, the arbitrator determined that changes to a contract are not permitted absent fresh consideration. The Arbitrator also comments on the fact that the Employer had a mechanism available to it to honour the salary set out in the first offer letter, namely remitting the matter to the Deputy Minister, but failed to use it.

21The Association submits the increase given to Robins in the first offer letter that, by virtue of the arbitration award it was required to honour, was 13%. The increase in issue in this case is 11%. Further in the instant case, as in Robins, there is no evidence the Employer tried to get approval to give the Complainant the higher salary.

22In the submission of the Employer, what happened in this case was an honest to goodness human error that is bound to happen in a public service with over 60,000 employees. The Complainant did not detrimentally rely on the salary stated in the first offer letter and he was informed of the error and the correct salary within 24 hours. The Dispute was not filed by the Complainant for 2.5 years. To prevent the Employer from fixing a true and honest error runs contrary to the tenants of cooperative labour relations. The Employer submits that it was entitled to promptly rectify its honest error and doing so does not run afoul of the collective agreement.

23The Employer recognizes the similarities between the facts of this case and those in Robins but argues there are significant differences. The Employer argues Robins did not concern an honest to goodness mistake. Rather, as stated at paragraph 67 of the decision, the manager in Robins fully intended to offer Robins the higher rate and the arbitrator comments that she did so in order to entice Robins into agreeing to the contract. In the instant matter there was no intention on the manager’s part to offer the higher rate. The manager’s intention at all times was to offer a 3% increase. The higher rate was inserted into the offer letter due to a mistake by Recruitment Services who also fully intended to offer a 3% increase. There is no element of bait and switch or buyer’s remorse in the present case. There is nothing unreasonable in an outfit as large as the OPS for a manager to rely on their human resources partners to put together the offer package and calculate the salary.

24The Employer’s primary position is, where an honest bona fide administrative error occurs the Employer is entitled to rectify that error as long as it does so promptly and there has been no detrimental reliance and relies on the following cases in support: Overwaitea Food Group V. UFCW Local 1518 (Campbell) 2016 CarswellBC 1530, 127 CLAS 147 (BC LA) (Sullivan); St. Joseph’s Hospital v. ONA, 1994 CarswellOnt 6979, 37 CLAS 22 (ON LA) (Thorne); OPSEU (Coelho) v. Ontario (MCYS), 2013 CanLII 74176 (ON GSB) (Lynk).

25In Overwaitea, supra, the employer made a voluntary severance offer to the grievor in the amount of $58,043.00 and provided a deadline of May 15, 2015 to the grievor to apply. On April 26, 2015 the grievor applied for the offer by signing, dating and returning the offer to the employer. The Director of People Services thereafter emailed store managers a list of team members who had been approved. Thereafter the grievor received a phone call from his store manager informing him that his application was accepted. That same day, only a few hours later, the store manager received an email telling him to hold off on notifying the grievor he had been accepted. That same day, the store manager called the grievor and, as the grievor did not answer, left a voicemail apologizing and informing the grievor that he had been instructed that he could not confirm the names of the persons accepted. Two days later, the store manager again contacted the grievor and told him his application had been denied.

26The agreed statement of facts indicates that, after the Director of People Services sent out the email with the list of team members who had been approved, the employer determined too many offers had been approved. The employer sought to correct its error by advising the four junior team members on the list, including the grievor, that their offers were withdrawn. The union argued the employer voluntarily entered into an agreement to pay the grievor an amount of money for his agreement to quit. A binding agreement had been entered into and neither party could unilaterally relieve against the obligations therein. The Employer argued it was entitled to correct a mistake in relation to the administration of the Collective Agreement, particularly where there has been no detriment caused by reliance on the error. The Employer herein relies on the following portions of Arbitrator Sullivan’s decision:

Decision

12 Having carefully considered all of the relevant facts together with the parties' respective submissions I determine the grievance cannot succeed. In the absence of any detrimental reliance the Employer is allowed to rectify the mistake it made in offering the Grievor voluntary severance. Significantly, the Employer informed the Grievor of its mistake after only a few hours after the Grievor had accepted the offer, and the Grievor had taken no steps that might constitute detrimental reliance.

13 This case is best characterized as one involving an error in the administration of a collective agreement matter, and arbitrators have generally allowed timely retractions in such situations, subject to detrimental reliance. The principle that "a deal is a deal and cannot be rescinded or corrected after having been reached" is not so cut and dry in the labour relations context, which in the present case is long-term and ongoing, involving a great many separate stores and thousands of employees, and based on trust and cooperation.

14 Despite there being no evidence tendered to explain the specific details of the Employer's mistake, the agreed statement of facts is clear an error was made that led to the voluntary severance offer to the Grievor, and this is not a situation that can properly be characterized as "buyers remorse" in the usual sense of that term.

18 These decisions suggest that while the requisite offer and acceptance may exist to indicate an enforceable agreement, an employer acting in good faith in relation to the administration of the collective agreement can correct an error, subject to detrimental reliance. The extent to which this approach differs from the determination of commercial contracts in the court cases cited as authorities by the Union may be a reflection of the different contractual contexts.

19 In the present case, holding the Employer to the terms of the arrangement reached, based on its error in calculating how many employees should be offered voluntary severance, and in the absence of any detrimental reliance, would effectively amount to a windfall "gotcha" inconsistent with some of the key tenets of a cooperative, enduring, trust-based collective bargaining relationship, and the parties' express reference in their Collective Agreement to establishing conditions promoting a harmonious relationship, and providing for the fair and amicable adjustment of disputes, and "not tak(ing) unfair advantage of each other". The error in the present case has substantial financial consequences, and enforcing the agreement that was reached on the basis of the error, in the absence of any detrimental reliance, would undermine the parties' labour relations environment.

27The second case relied upon by the Employer, is French, supra, a decision of the Grievance Settlement Board. In French, the grievor was an unclassified Correctional Officer who applied for a classified position. He was informed on June 2, 2010 that he was successful and given a printed version of his schedule. Nine hours later he was contacted and told there had been an error, due to a break in his service, he did not meet the criteria. A grievance was filed and the grievor argued the employer could not rescind its offer of classified status. The arbitrator dealt with the issue at paragraph 24 as follows:

First, does the fact that an offer was made to the grievor, albeit in error, entitle Mr. French to classified status. The answer to this question is no. While I have much sympathy for the angst that this mistake must have caused the grievor, the Employer is entitled to make bona fide errors. There was no suggestion of bad faith in this regard and there is no evidence that would have me find this situation was anything other than an unfortunate mistake. For this Board to oblige the Employer to rollover this grievor because of a mistaken offer would be inappropriate. It is certainly fortunate that the Employer found and rectified the error within hours.

28Finally in St. Joseph’s Hospital, supra, on October 11, 1991, the Hospital sent a letter to 800 nurses offering them an opportunity to cash out their sick bank balance. Nurses interested in the offer were invited to complete a form and return it no later than November 12, 1991. On October 28, 1991, several of the nurses were sent a second letter informing them the first letter had been sent to them in error and that they did not qualify as they had not worked for a total of at least five years full-time. Some of the nurses who had been sent the second letter had already signed forms indicating that they wished to accept the offer and others made it clear they wanted to take advantage of the proposal. A grievance was accordingly filed. The Hospital argued that the matter was one of mistake and, since the Association had not changed its position as a result of the letter of October 11, 1991, the Hospital was not prevented from correcting the error.

29The arbitrator considered the matter as follows:

52 Principally on the basis of the evidence of Sister Nancy Sullivan, it is fair to characterize the situation as one of mistake. There is no evidence that the Hospital actually intended not to insist on the requirement for five years of full-time service (that being its understanding of the provisions of the collective agreement and its consistent practice in the past). Indeed on this occasion there is no evidence that there was any discussion of the requirement for five years of full-time service one way or the other, either when the matter was raised with the Association or internally at the Hospital. One aspect of the mistake on the Hospital's part might be said to be the omission of any reference to the service requirement from the letter. The other aspect was more fundamental in that the letter was sent to some employees who should not have received it as they lacked the necessary full-time service. That error might be characterized as a mistake of fact of the sort which would ordinarily permit the Hospital to correct the error even if money had been paid out. That may not be the end of the matter as a mistake may in some circumstances amount to a representation of the sort which mill give rise to promissory estoppel. Re Canada Post (supra) illustrates how this may occur. In that case erroneous information given by a clerk to a postal worker about her vacation entitlement caused her to take more time off than she was entitled to and thereby to lose pay. The board found that the clerk's mistake became the Employer's position for which it must take responsibility (at p. 219). Further, the postal worker had relied on the representation and had suffered loss as a result. The Employer was not entitled to recover the overpayment of vacation pay from the employee, the board taking the view that the employee's change of position to her detriment founded a promissory estoppel Storthoaks v Mobil Oil (supra) makes a similar point.

53 In the present case we would accept that the sending of the letter to the grievors operated as a representation that the Hospital had determined that they met the service qualifier. The sending of the letter to the grievors was an error, but one for which the Hospital might have to take responsibility if the other elements of promissory estoppel beyond that of a representation were present. We would have more difficulty seeing the omission of any reference to the necessity for five years of full-time service as a representation that that requirement would not apply; the letter and the preceding discussion mentioned that the requirement for a termination of employment would not apply, and in that context the omission of any reference to the requirement for five years of full-time service does not seem to carry the weight of meaning later argued for by the Association.

54 We adopt the view indicated by Re Maritime Telegraph and Telephone, Re K-Line Maintenance and Re Metropolitan Toronto Civic Employees Union (supra), that if an estoppel is to be made out it must be on the basis of a representation made to the Association rather than to individual employees. It is clear on the evidence that the Association was involved in the preparations for the making of the offer and was aware of the precise terms in which the offer would be made to individual employees It is reasonable to view the representation that was made, to the extent that there was one, as having been made to the Association as well as to individual nurses.

55 An important element of promissory estoppel appears to us, however, to be lacking. We are unable to see that the individuals involved, or the Association, changed their positions to their detriment as the result of the discussions and the sending out of the letter. It does appear that the Association, while it was considering its position, felt under some pressure from its members to go along with what was being proposed by the Hospital. In doing so the Association responded to the wishes of some of its members and we would have difficulty in viewing that as a detriment to it. If matters had gone further and if the payment proposed had in fact been made to some employees the situation might have been different. As it was, the Hospital recognized its error and notified the affected employees. In the end no employee was in any different position after the letter of October 28th, than she was before the initial proposal was made, and nor was the Association. In our view the circumstances did not give rise to a promissory estoppel.

56 For the foregoing reasons the grievances must be dismissed.

29The Employer states the facts of the instant matter are similar to those of the cases referred to above in that a mistake was made that was very quickly rectified and there was no detrimental reliance.

Analysis and Decision

30The Association relies heavily on Robins, supra, and argues that the facts of the instant matter are indistinguishable. Having regard to the emphasis placed on Robins, a thorough review of its facts, and the arbitrator’s analysis, is warranted.

31The facts of Robins are as follows. Robins was offered and accepted the position of Learning and Development Coordinator in MCSS at a salary of $68,000 by way of letter dated September 10, 2015. The next day, the Employer gave Robins a new offer letter reducing her salary to $63,482. One of the issues in the case was whether the Employer could revoke its first offer, after it had been accepted, and substitute it with the second offer with the lower salary.

32Robins had previously worked in the OPS from January 7 to July 31, 2015 earning $60,400. As is indicated in paragraph 7, when Robins and the hiring manager, Ghouse, met on August 14, 2015 to discuss employment opportunities in the MCCS, she was not then employed with the Employer. As such, when Ghouse extended a verbal offer of employment to Robins over the telephone on August 28, 2015, and when she sent Robins an email that same day setting out some of the terms of the offer, Robins was not then employed with the Employer. She was being extended an offer of employment.

33The arbitrator’s reasons begin at page 25, paragraph 63. Paragraph 63 sets out the facts stated above. Paragraph 64 sets out factual findings made by the arbitrator on questions of fact not relevant to this matter. In paragraph 65, the arbitrator finds Robins stated, when presented with the second offer at the lower salary, that she would love to stay and was ok with the salary changes, however, the arbitrator finds, in the absence of detrimental reliance, the essential elements of estoppel had not been made out. Estoppel is not an issue in the present case. In paragraph 66, the arbitrator turns to the issue, as identified in paragraph 56, as “did the Employer violate the collective agreement by reducing the annualized starting salary for the Complainant’s Level 4 position.”

34At paragraph 66, the arbitrator disagrees with the Employer’s submission that there was only one contract between the parties “at that point.” He goes on to quote from McGavin Toastmaster Ltd., supra, “… individual relationships as between employer and employee have meaning only at the hiring stage…” with the emphasis in bold added by the arbitrator. The arbitrator then explains McGavin Toastmaster Ltd. in his own words: “...there is a limited window for individual contracts in the context of employment under a collective bargaining regime, at the stage where the employee is hired….” The arbitrator describes this window as a “narrow point of interface” and concludes that, “after the hiring stage” the individual employment contract and the terms of the collective agreement “merge so that only the collective agreement remains and governs the relationship going forward.”

35Thus, in Robins, the offer made to the complainant was made “at the hiring stage.” At that stage, the arbitrator found there to be a “limited window for individual contracts.”

36The arbitrator found as a fact that Ghouse intended to offer Robins the higher salary and that the salary as not prohibited by the collective agreement. The arbitrator then set out his analysis of the issue in terms of offer and acceptance having created a contract that cannot be easily discarded:

Where I have found there was a clear intention by Ms. Ghouse to offer that rate of pay in order to encourage the Complainant’s acceptance that is not prohibited by the collective agreement, and evidence of the clear acceptance of that offer by the Complainant, I conclude that a contract to pay $68,000 as the starting annualized salary in consideration of the Complainant’s acceptance of the offer has been established by the Association that was binding on the Employer. Contracts are important commitments that can’t easily be discarded by simply tearing them up (both literally and figuratively), as the Employer has purported to do in the instant case; and there are serious implications when a written contract expressly setting out the starting salary is unambiguously offered and unequivocally accepted outside of those circumstances governed by the limited legal principles of “mistake”, which was not argued here.

37Thereafter, the arbitrator refers to the Employer’s failure to utilize the mechanisms provided for in its internal administrative procedures to pay Robins the higher salary as “a serious procedural mistake that deprived the Complainant of her rights under the collective agreement.” Reference is also made to article 3 of the collective agreement (the management rights clause) and the arbitrator states that, in setting the starting salary for an employee… there is a presumption that the employer will act honestly, reasonably, in good faith and not arbitrarily or capaciously” citing Bhasin v. Hyrnew 2014 SCC 71. At the end of paragraph 68, the arbitrator states that labour arbitrators have adopted the principles established in Bhasin “in defining the limits of managerial discretion” and at paragraph 69 finds the Employer’s conduct to have been “arbitrary” because it failed to use the mechanism available to it to remedy Ghouse’s error.

38At paragraph 70, the arbitrator turns to contract law principles and finds the Employer’s failure to give any consideration for the lower salary, when Robins was in a vulnerable position, was “… sufficiently unjust as to be beyond the reasonable expectations of the parties for the fair administration of the Employer’s management rights under article 3 of the collective agreement.” The arbitrator found that the lack of consideration for signing the second contract, meant “it was not binding at the common law interface with the collective agreement.” The case of Hobbs v. TDI Canada Ltd., dealing with a non-union employee, is cited in support. The following quote from Hobbs is relied upon:

42The requirement of consideration to support an amended agreement is especially important in the employment context where, generally, there is inequality of bargaining power between employees and employers. Some employees may enjoy a measure of bargaining power when negotiating the terms of prospective employment, but once they have been hired and are dependent on the remuneration of the new job, they become more vulnerable. The law recognizes this vulnerability, and the courts should be careful to apply Maguire and Techform Products only when, on the facts of the case, the employee gains increased security of employment, or other consideration, for agreeing to the new terms of employment.

43In the present case, I conclude that Hobbs received no consideration for signing the Solicitor’s Agreement.

39At paragraph 71, the arbitrator states as follows:

I therefore conclude that the second contract signed by the Complainant was unenforceable for want of fresh consideration, leaving only the first contract with the Complainant which the Employer breached after the hiring of the Complainant inside the narrow window permitting an individual contract to exist within a collective bargaining regime that is governed by the common law principles of contract.

40Having regard to the arbitrator’s analysis as summarized above, the arbitrator found that, at the stage the offer in Robins was made, namely the hiring stage, it was possible for an individual contract between Robins and the employer to have been created. According to common law principles of contract, such a contract cannot be amended absent consideration. The arbitrator thus determined “the second contract signed by the Complainant was unenforceable for want of fresh consideration…”

41The arbitrator considered the employer’s conduct as measured against its obligation to exercise its management rights, as well as its contractual duties, honestly and in good faith, and not arbitrarily or capriciously. The arbitrator found the employer’s failure to remit the salary issue to the Deputy Minister, who could have approved the higher salary, rendered the employer’s conduct arbitrary. Having regard to the arbitrator’s determination that the second contract was unenforceable given the lack of consideration, this analysis is obiter.

42There are two significant differences between Robins and the facts of the instant matter. As argued by the Employer, on the facts in Robins, the Employer fully intended to offer Robins the higher salary. It was not a case of an incorrect salary number having been inserted into the offer letter as a result of a human error. The number in the offer letter that the Employer sought to change was the number the Employer intended to offer. Secondly, and perhaps more significantly given the basis on which Robins was decided, is that Robins was not employed by the Employer at the time she was hired into the LDS position. As Robins was being “hired” she fell within the narrow window of time when individual contracts of employment between an employee and an employer can exist in a unionized context. The existence of an individual contract of employment led the arbitrator to apply common law contract principles to the matter before him. The clear contract principle that there must be consideration for entering into a contract was absent in the case of the second contract and it was thus void.

43The Complainant, herein, was employed in the OPS at the time he applied for and was the successful candidate in a job competition. Unlike Robins, he was not offered a job during a period of time that an individual relationship between employer and employee could exist. The Complainant was being promoted, and his relationship with the Employer was, at all material times, governed by the terms of the Collective Agreement. Had the Employer offered the Complainant a salary below, or above, the salary range, and he accepted it, there would be no doubt that such would be contrary to the Collective Agreement and could be altered notwithstanding the existence of a “contract.” The offer made to the Complainant was however within the range. It was a mistake. No one intended to offer the Complainant an 11% increase. Was it a violation of the Collective Agreement for the Employer to essentially revoke its first offer and present the Complainant with the second offer? For the reasons that follow I find it was not.

44First, I am not persuaded that the purpose served by the common law requirement that there be consideration to support an amendment to an employment agreement applies in the unionized environment. In the non-union environment, once an employee is hired, an inequality of bargaining power as between themselves and their employer develops, and the employee becomes vulnerable to having unfavourable changes to their terms and conditions of employment thrust upon them. The requirement that there be consideration for a change to an employment agreement helps to protect such a vulnerable employee. In the union environment, the existence of the union, as the employee’s representative, as well as the strictures of the collective agreement, prevent an Employer from making, or stipulate how an Employer can make, unilateral changes to an employee’s terms and conditions of employment. A unionized employee does not become vulnerable in the same way as a non-union employee and there is simply not the same opportunity, in the unionized environment, for an Employer to take advantage of an employee. As such, I do not find the lack of consideration in this instance to be determinative of the issue as it was in Robins, supra.

45Further, as argued by the Employer, in a workplace with 60,000 employees there are countless “contracts” being prepared and accepted every single day. Every day employees sign up for vacation and have it approved, apply for a leave of absence and have it approved, apply for a job posting, accept a job offer, get laid off, get promoted, demoted, or transferred, seek accommodation, apply for benefits, etc. Every day, numerous letters are written confirming arrangements on some detail of employment that has been approved. While they are intended to be confirmatory of the understanding between employees and the employer on one aspect of an employee’s employment they are not as inviolable as an individual freestanding contract of employment that would typically set out all of an employee’s terms and conditions of employment. These countless daily contracts deal with one or a few aspects of an employee’s terms and conditions of employment, and as the cases relied upon by the Employer establish, the give and take of good labour relations calls for parties to be able to correct innocent errors where there has been no detrimental reliance.

46Finally, allowing the Employer to correct its error does not leave employees at the whim of a careless employer. The Employer is required to conduct itself honestly, in good faith, and not arbitrarily or capriciously in the exercise of its management rights. Also, the equitable doctrine of estoppel applies in the labour context and is available to hold the employer to an offer that has been accepted in a case where there has been detrimental reliance. These two concepts give an arbitrator sufficient oversight to require the Employer to act honestly, in good faith and not arbitrarily or capriciously when entering into agreements with employees, and to hold an Employer to an agreement entered into in error where there is detrimental reliance. In the present case the evidence does not establish a violation of the Employer’s obligation to conduct itself honestly, in good faith, and not arbitrarily or capriciously and there is no evidence of detrimental reliance.

47For the foregoing reasons the Dispute is dismissed.