Brant Haldimand Norfolk Catholic District School Board v. Olech, 2006 CanLII 61257

0773-04-PE Brant Haldimand Norfolk Catholic District School Board, Applicant v. Linda Olech, Respondent.

BEFORE: Mary Anne McKellar, Vice-Chair, Margaret Kvetan and Pauline R. Seville Members.

APPEARANCES: Lauri A. Wall, Wallace Easton and Paula Dunn appeared for the applicant; no one appeared for the respondent

CITE AS: Brant Haldimand Norfolk Catholic District School Board (13 April 2006) (P.E.H.T.)

DECISION OF THE TRIBUNAL; April 13, 2006

Introduction

1The applicant (“the School Board”) objects to the Order of a Review Officer dated April 23, 2004, which determined (among other things) that the outstanding retroactive pay equity adjustment owing from the School Board to the responding party (“Ms. Olech”) was $2627.37 plus interest.

2Although Ms. Olech filed a response to this application, she did not attend the hearing, which was held on March 1, 2006.

The Facts

3The Tribunal heard evidence, from one witness, Paula Dunn. Ms. Dunn is the School Board’s Manager of Human Resources. She commenced her employment with the School Board after Ms. Olech’s employment had ended. Her knowledge of the terms and conditions of Ms. Olech’s employment was confined to information gleaned from a review of the documents pertaining to her hiring, salary revisions, and T-4s. Ms. Dunn did communicate to Ms. Olech in writing the amount of retroactive pay that the School Board had determined was owing to her in respect of pay equity, and was able to shed light on how that calculation had been made.

4The School Board came into being on January 1, 1998 as a result of school board restructuring in Ontario.

5In March 1998, the School Board adopted recommendations that its non-union classifications be paid in accordance with a four-step grid, where the starting salary was to be pegged at 88% of the fourth-step salary, and providing for “equal increments on each anniversary to year 3 [step 4]”. The salary range established for the position of Executive Secretary was $29, 664 (minimum) to $33,708 (maximum), but the rate of pay at the two middle steps was not specified.

6On March 24, 1998, the School Board posted an opening for Executive Secretary. The posted salary range was $32,536.16 to $33,708.14. Ms. Olech obtained this position and commenced her employment in this capacity on May 6, 1998. Her letter of appointment dated April 30, 1998 states that “your salary will be $32, 426.80”. The “Personnel & Payroll Information” form completed on May 1, 1998 does not contain any indication of her being placed at any particular step, on a salary grid. It indicates that her base salary is $32, 926.80. Notwithstanding this documentation, Ms. Dunn testified that Ms. Olech’s T-4 for 1998 indicated that she was actually paid based on an annual salary of $32, 665.58. The T-4 was not introduced in evidence.

7On Ms. Olech’s anniversary date (May 6, 1999) she received a salary revision, which was also documented in a “Personnel & Payroll Information” form. The May 1999 form indicates under “Reason for Change” that “2^nd year salary increment due (App’t Exec. Sec. 5/6/98 – previous secretarial experience given when app’t)”. The reference to “2^nd year” is clearly an amendment: originally the document read “3^rd year” in its place. The “Revised Salary Calculation” portion of the form has also been amended. Originally, it indicated a revised salary of $33, 708.14, but that was amended to read $33, 186.92. The original of this form was not introduced in evidence and Ms. Dunn testified that she had never seen it. Effective September 1, 1999, all non-union classifications received a 1% salary increase. Ms. Dunn testified that, based on T-4 documentation, the actual salary paid by the School Board to Ms. Olech in 1999 was $33, 134.66. The T-4 was not introduced in evidence.

8Ms. Olech’s employment was terminated effective January 14, 2000. The School Board’s payroll records indicate at this time that her bi-weekly pay was $1290.53, which translates into an annual salary of $33,553.78 (reflecting that she had in fact received a slightly greater than 1% increase over her May 1999 adjusted salary rate of $33, 186.92).

9The School Board posted a new post-amalgamation pay equity plan for its non-union employees on October 27, 2000. Following the statutorily-mandated employee review process, a revised plan was posted on February 12, 2001. No further objections to the plan were made, and it was deemed approved pursuant to the Pay Equity Act in mid-March 2001.

10By this time, Ms. Dunn was the School Board’s Manager of Human Resources, and she was in receipt of e-mail correspondence from Ms. Olech inquiring about her pay equity entitlements. Ms. Dunn followed up with Ms. Olech by letter dated May 30, 2001, informing her that her retroactive pay equity adjustment had been calculated as $3252.28 gross, based on the difference between the unadjusted and pay-equity adjusted grid rates for Executive Secretary, and considering her as at Step 2 (Year 1) during her first year of employment and Step 3 (Year 2) during the balance of her employment. This letter also set out the applicable salary rate for each step of the grid, and although it post-dated the end of Ms. Olech’s employment by more than a year, it was the earliest iteration of the four salary grid rates that we saw. None of the documentation prepared during Ms. Olech’s employment set out the four-step grid for the Executive Secretary classification by specifying the actual salary payable at each step.

11The School Board’s non-union pay equity plan utilized the proportional value method of comparison. The School Board conceded at the hearing that the pay-equity adjusted job rate (Step 4) for the Executive Secretary classification was $37,237.00, and that this exceeded by $3529 annually the pre-pay equity job rate payable to the Executive Secretary.

12Ms. Olech complained to the Pay Equity Commission about how the School Board had calculated her retroactive pay equity adjustment. Although she was never paid the job rate (Step 4) for Executive Secretary, the Review Officer calculated her retroactive entitlement on the basis that the Act required her to receive the maximum annual adjustment ($3529) in respect of each year of her service, regardless of how her salary compared to the job rate and regardless of where she may have been placed on the salary grid. The Review Officer also calculated amounts he found owing to Ms. Olech pursuant to the Employment Standards Act (an aspect of the case that was ultimately settled and not pursued before the Tribunal), and based on his determination that the 1% pre-pay equity general salary increase effective September 1, 1999 had been withheld from her. The gross amount of retroactive pay that the Review Officer found owing to Ms. Olech was $6,358.15. The Review Officer also ordered the School Board to pay interest to Ms. Olech. His order issued on April 23, 2004.

13While waiting for the Review Officer to resolve the matter, or issue an Order, the School Board had paid Ms. Olech $3,708.78 gross on July 29, 2003, without prejudice to its position that this exceeded what she was owed.

The School Board’s Position

14The School Board’s position is that all of its non-union job classes are paid in accordance with the following four-step salary grid formula: Step 1 (Year 0) is paid 88% of the maximum; Step 2 (Year 1) is paid 92% of the maximum; Step 3 (Year 2) is paid 96% of the maximum; and Step 4 (Year 3 and above is paid 100%). With respect to Ms. Olech, the School Board takes the position that she was given credit for one year’s experience when hired. Consequently, she started at Step 2 (Year 1) of the grid. On her anniversary date (May 6, 1999) she moved to Step 3 (Year 2). Her employment was terminated before she reached another anniversary date.

15In calculating Ms. Olech’s retroactive pay equity entitlements, the School Board considered that she was entitled to 92% of the maximum adjustment during the first year of her employment, and 96% of the maximum adjustment pro-rated for the balance of her employment. The School Board asserts that this approach is not inconsistent with the Act and maintains internal equity within its compensation system. The Review Officer, as noted, calculated Ms. Olech’s retroactive pay equity adjustment on the basis that she was entitled to the maximum adjustment throughout her employment regardless of her years of experience, placement on a salary grid, or the relationship between her actual salary and the maximum job rate for her classification. The Review Officer appears to have based his decision on section 9(3) of the Act which stipulates that, “where to achieve pay equity, it is necessary to increase the rate of compensation for a job class, all positions in the job class shall receive the same adjustment in dollar terms”. The School Board submits that the Review Officer erred in equating “positions” with “incumbents” and failed to consider the possibility that the Executive Secretary job class consists of only one position – the Executive Secretary. The School Board noted that the Tribunal has commented on the meaning of section 9(3) in two previous cases, neither of which was referred to by the Review Officer. The School Board encouraged the panel to apply the reasoning in Gloucester (No.2) (1991), 2 P.E.R. 208 as opposed to that in Glengarry Memorial Hospital (No.2) (1991), 3 P.E.R. 34.

16The School Board also submitted that the Review Officer had delayed unduly in making his Order and that it was therefore inappropriate for him to have required the School Board to pay interest to Ms. Olech because that amounted to penalizing the School Board for his delay.

17The School Board sought to have us: quash the Review Officer’s order, including the requirement that interest be paid; declare that pay equity had been achieved for the Executive Secretary job class.

Analysis

18The presenting issue for the Tribunal is the calculation of Ms. Olech’s retroactive pay equity adjustment. This is not an application in which an objection per se to a pay equity plan has been filed and has remained unresolved. As noted above, the School Board’s pay equity plan for its non-union employees has been deemed approved since mid-March 2001. We do not find that it is necessary or appropriate to make any findings, comments, or declarations with respect to whether the plan complies with the Act or whether pay equity has been achieved for the Executive Secretary job class. We know nothing of what happened to the job classification after January 14, 2000. We do not know if it was filled or how the salary of any subsequent incumbent may have been adjusted when the plan was posted and then deemed approved.

19The underlying theory of the School Board’s case is that the pay-equity adjusted rates for each pay step in a job class should be calculated having regard to the relationship between that pay rate and the job rate. On this theory, the Step 1 salary should be increased by 88% of the maximum pay equity adjustment, the Step 2 salary by 92% of the maximum adjustment, and so on. Even without engaging in any comparative analysis of Gloucester and Glengarry and the language of section 9(3) of the Act, the obvious difficulty with the School Board’s theory is that it does not offer much assistance in calculating Ms. Olech’s retroactive pay equity adjustments. The salary that she was actually paid from time to time did not correspond with any step on what the School Board now says is the grid for her classification. There is no documentation contemporaneous with Ms. Olech’s employment setting out the salary for each grid step and no document specifically setting out her placement on the grid. It seems to us in these circumstances that accepting the underlying premise of the School Board’s theory -- that the Act permits the maximum pay equity adjustment for any given single-position job class with more than one salary rate to be pro-rated to maintain the relationship among those salary rates -- requires that we consider what relationship Ms. Olech’s actual paid salary bore to the maximum for her job class, and calculate her retroactive pay equity adjustments owing on that basis. These calculations are set out below.

20In 1998, Ms. Olech worked 17.3 of 26 pay periods. Her annual salary paid was $32,665.58. The job rate for the classification of Executive Secretary was $33,708.14. Ms. Olech was paid 97% of the job rate. The annual pay equity adjustment required to bring that job rate up to the male job line was $3529. Ms. Olech’s retroactive pay equity adjustment for the 1998 salary year was (17.3 ÷ 26) x $3529 x .97 = $2277.70.

21Between January 1, 1999 and May 6, 1999, Ms. Olech worked 8.8 pay periods at the same salary as she had in the previous year. Her retroactive pay equity adjustment for this period is therefore (8.8 ÷ 26) x $3529 x .97 = $1158.60.

22On May 6, 1999, Ms. Olech’s salary was increased to $33,186.92. That is 98.5% of the Executive Secretary job rate. As we understand it, the 1% increase effective September 1, 1999, was applicable across the board so it would not have affected the relationship between Ms. Olech’s salary and the job rate. From May 6, 1999 until the end of the year, Ms. Olech was employed for 17.2 pay periods. Her retroactive pay equity adjustment for this period is therefore (17.2 ÷ 26) x $3529 x .985 = $2299.55.

23Ms. Olech worked one pay period in 2000, at the same salary as she had in 1999. Her retroactive pay equity adjustment for 2000 is therefore (1 ÷ 26) x $3529 x .985 = $133.69.

24The total amount of Ms. Olech’s retroactive pay equity adjustment, calculated as above, is $5869.54. She has already been paid $3730.78 on July 29, 2003, 33 months after the post-amalgamation plan was posted. The outstanding principal owing to her is therefore $2138.76. We cannot accept the School Board’s contention that requiring it to pay interest on any of the retroactive pay owing to Ms. Olech amounts to penalizing it. In our view, including an amount in respect of interest merely recognizes the present value of the money Ms. Olech ought to have been paid previously. We rely on the reasoning of the Tribunal in Peterborough (Clow) (No.3) (1996), 7 P.E.R. 33, at ¶¶ 65-67. Pursuant to the Courts of Justice Act, the applicable annual interest rate at the time the plan was posted in October 2000 was 6%. The interest payable on $3730.78 for 33 months is $615.58. As of April 27, 2006, the amount of time that will have elapsed between the posting of the plan and the payment of the balance of her retroactive pay ($2138.76) to Ms. Olech will be 66 months. The interest payable on that outstanding principal for 66 months is $705.79.

25In summary, the School Board’s position is that it was permissible for it to adjust those salary rates below the job rate in such a fashion as to maintain the proportional relationship among the salary rates. That position is consistent with the determination of the majority in Gloucester. Indeed, it is also consistent with the rationale expressed by the majority in Glengarry. In the absence of any objection to the pay equity plan and in the absence of a responding party to clearly advocate otherwise, we are prepared to accept that the School Board’s approach was permissible. We also find, however, that the School Board erred in its application of the principle to the calculation of Ms. Olech’s retroactive pay for the reasons set out above. Accordingly, the net result of our calculations above is that the School Board is directed to pay to Ms. Olech the amount of $3460.13. If this amount is not paid on or before May 27, 2006, it will attract post-judgment interest in accordance with the Courts of Justice Act.

26The Review Officer’s order is hereby revoked.