P/0014/94

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

H. Herbrand

Grievor

• and -

The Crown in Right of Ontario (Ministry of Transportation)

Employer

BEFORE

S.M. Walter

FOR THE GRIEVOR

H. Herbrand

FOR THE EMPLOYER

D.B. Jarvis, Counsel Filion, Wakely & Thorup

HEARING

September 7, 1995 and October 6, 1995

THE DECISION

Preliminary objections concerning the board’s jurisdiction and the timeliness of the grievance were raised by the employer at hearings on September 7, 1995, and again on October 6, 1995. It was the Employer’s assertion that the board does not have the requisite jurisdiction to adjudicate salary compression or conversion complaints. It was further argued that the board does not have jurisdiction to grant a remedy, of any kind, as it relates to salary.

If the board were to assume jurisdiction, the matter would be reviewable by the court. Counsel for the Employer maintained that the grievance ought to be dismissed on the basis of delay (the subject matter was announced in August, 1991, and the grievance was filed January 1993). The employer also argued that the application of the “MCP (Management Compensation Plan) Compression” policy was discretionary and was not governed by the force of law.

Documentary evidence showed that on January 21, 1993, the grievor sent the following memorandum to Mr. Garry Todd, Head, Planning and Design Section, Northern Region:

“RE: GRIEVANCE - Compression

This grievance is being submitted pursuant to Regulation 881, Section 50 of The Public Service Act.

I currently hold the position of Area Manager, Planning and Design, Northern Region, as a non-professional, and have filled the position since January 1, 1989. My classification is now a TEN 19.

Among numerous other duties, I have, since June 12, 1989 directly supervised a subordinate Senior Project Manager who is a Professional Engineer (P.P.E.8/former PEN 18). On January 1, 1990 this subordinate engineer was reclassified to P.P.E.8 at a salary of $65,442.00. My salary at the time was $60,143.00. The salary of this subordinate engineer today is $70,886.00 while mine stands at $63,525.00. Failure on the part of the Ministry to apply the M.C.P. Compression Directive dated June 5, 1991 (attached) results in a shortfall in salary to me of over $32,000.00 over the three year period and significantly affects my current salary and resulting pension. It is my understanding that this compression policy continues to this day.

The supervision required and directly applied by me to this individual on a day to day basis is primarily in the field of Engineering Practices and Policies and is not purely administrative. In fact the position of the engineer in this situation and the working relationship we share is that of my position providing ongoing technical training to permit the engineer to gain expertise in the planning and design field.

My qualifications and expertise are derived from thirty-six years of experience in the field of highway planning, design and construction.

It is my contention that the Ministry, in failing to apply it’s (sic) own policy with respect to compression of salary between myself and the subordinate engineer in question has violated my right to fair working conditions and terms of employment. I further contend that the reference in the noted Directive to a “professional engineer reporting to a non engineer”, (P3 - Application Criteria for Ministries) is not applicable in this case as the type of supervision and advice required and given by me is almost entirely engineering in nature and vital to the successful work function of the engineer in question.

I attach for your information relevant correspondence on this issue. Please forward any correspondence to the following:

Henry Herbrand,

Area Manager

C.C. M. Kelch - Assistant Deputy Minister

S.C.J. Radbone

D. J. Armatage

B. Morning”

On June 14, 1994, Mr. Garry Todd, Acting Manager, Engineering and Right-of-Way, Northern Region, denied Mr. Herbrand’s grievance (pursuant to a stage II hearing held on June 9, 1994).

Subsequent to having his stage II grievance denied, the grievor wrote the following letter to Mr. George Davies, Deputy Minister, Ministry of Transportation:

“RE: Grievance of Henry Herbrand

(Compression) Dated January 21, 1993.

Dear Sir:

Thank you for your letter of June 13, 1994, regarding my grievance.

As you will note from the attached, I met with Mr. Gary (sic) Todd, Acting Manager, Engineering and Right-of-Way and Mr. Roger Hudebine, Human Resources Consultant, Northern Region, on June 9, 1994. The meeting did not result in a satisfactory conclusion from my point of view and as directed in your letter I am requesting that your office give the matter further consideration.

I must admit that I am still somewhat surprised that after all this time this matter needs to be resolved by way of “The Formal Grievance Procedure”. Management Board Cabinet Policy with respect to M.C.P. Compression is defined in of June 5, 1991 to Human Resources/Personnel Directors. My former position with respect to supervision of a subordinate engineer is covered by this memorandum and the technical and administrative supervisory relationship between an Area Manager and a Senior Project Engineer (Manager) in a Regional Planning & Design office is easily verifiable within the Ministry.

I assume your office has copies of relevant documents submitted with my letter to you of April 30, 1994. If not, I would be pleased to forward copies.

I thank you for your attention in this matter and trust I will be hearing from you in the near future.”

In response to the grievor’s June 20, 1994, letter to the Deputy Minister, he received the following response:

“Dear Mr. Herbrand:

Further to your letter dated June 20, 1994, the issues surrounding your grievance have been thoroughly investigated and as a result your grievance cannot be supported by this Ministry.

As set out in the regulations under the Public Service Act, you have the opportunity to further pursue your grievance to the Public Service Grievance Board to request a formal arbitration hearing.

Please be advised if the matter does go to arbitration, the Ministry will be raising a number of preliminary objections, including the position that the Public Service Grievance Board lacks jurisdiction to deal with a salary compression issue and that this position is supported by previous jurisprudence on this point.

Yours sincerely

George Davies

Deputy Minister”

At the time when Mr. Herbrand launched his complaint against his employer, he held the position of Area Manager, Planning and Design for the Northern Region. He held the position as a non-professional (he was not a professional engineer) since January 1, 1989 and was classified as a TEN 19. In the foregoing capacity he directly supervised a Senior Project Manager who was a Professional Engineer classified as P.P.E. 8 (formerly PEN 18).

Subsequent events caused a significant salary disparity between the grievor and his

subordinate. The history which gave rise to the disparity is well summarized at pp. 2-4 in Shaw et al and Ministry of Transportation, PSGB/C/0050/92, C/0043/92, C/0044/92, & C/0046-48/92, (Low).

“This matter came on before this Panel today on a preliminary objection upon which we are asked to rule prior to the grievances proceeding any further. It is the position of the employer that this Committee has no jurisdiction to entertain these grievances on the grounds that they are in substance grievances as to pay relationships in comparison to other employees and not classification grievances. The facts necessary to determine the preliminary objection are essentially not in dispute and are as follows.

From the 1960's forward, the Planning and Right-of-way Section of the Ministry has used both professional engineers and persons who are not engineers but who have specialized expertise in engineering technology in three positions: Area Manager, Senior Project Manager and Project Manager. Although a professional engineer and a non-engineer might both hold an identically named position in each of these three positions, there has historically been a pay differential between professional engineers and non-engineers with the exception of a two year period starting around 1978. Apart from this hiatus, the differential was between 2% and 5% at various times between engineers and non-engineers holding the same position. At one time, under the class standards regime, engineers fell within the engineering series and non-engineers fell with the engineering officers series. When the Management Compensation Plan came into effect, the professional engineers were allocated to the PEN series, a professional module, and the non-engineers were allocated to the TEN series, a technical module. Under that plan, Area Managers became PEN 19's if professional engineers or TEN 19's if non-engineers. Senior Project Managers became PEN 18's if engineers or TEN 19's if non-engineers and Project Managers became TEN 17's if engineers or TEN 17's if non-engineers.

It is agreed that prior to 1990, the engineers and non-engineers in the six classifications, namely PEN 17, 18 and 19, and TEN 17, 18 and 19, worked side by side doing essentially the same work although the professional engineers may have brought certain methodologies to the work which the non-engineers did not.

The above status quo started to undergo a change in 1987 with the publication of the Weiler Report. Thereafter, the provincial government agreed to collective bargaining with professional engineers to set rates of pay and the professional engineers formed the Association of Professional Engineers of the Government of Ontario (P.E.G.O.) which negotiated a Collective Agreement with the Government of Ontario dated October 5, 1990. Pursuant to the Collective Agreement, P.E.G.O. was recognized as the exclusive bargaining agent for all of the professional engineers, and as the parties were not able to agree to rates of compensation, the issue went to an interest arbitration. Arbitrator Dissanayake made an award in June of 1991 establishing the salaries for the professional engineers, which award is currently under judicial review.

Because of the Collective Agreement between P.E.G.O. and the Government of Ontario and the award on the interest arbitration, two important changes took place. The pay differential between engineers and non-engineers for the positions of Area Manager, Senior Project Manager and Project Manager increased. Secondly, these three positions were divided into six positions such that professional engineers who had been Area Managers came to be designated “Area Engineers”, professional engineers who had been Senior Project Managers came to be designated “Senior Project Engineers”, and professional engineers who had been Project Managers came to be designated “Project Engineers”. The non-engineers maintained the pre-existing position titles. As well, new evaluation standards came into existence for the professional engineers pursuant to which the new “PBE” series levels 1-12 replaced the old “PEN” series, Levels 11-22. The language describing the new standards in the PBE series is, however, identical to that in the PEN series. In summary, the professional engineers by reason of their collective bargain with the Government of Ontario, were taken out of the management compensation plan and the classification regime used in connection with that plan, and instead were classified and were paid pursuant to the arbitrated rates of pay under the Collective Agreement which generated for the engineers a relatively higher rate of compensation than they had enjoyed under the management compensation plan and which created an even greater spread between their level of compensation and that enjoyed by their non-professional colleagues.” (Emphasis Added)

On January 28, 1993, the arbitration board, in the above matter, determined that it did not have the jurisdiction to apply the P.E.G.O. classification scheme (as set out in the P.E.G.O. collective agreement) to the Management Compensation Plan. The board also made it clear that it had no jurisdiction to create new classifications within the MCP classification scheme.

The six grievors in Shaw et al and Ministry of Transportation, supra, challenged the

arbitration award through the Ontario Court of Justice, General Division, on November 29, 1994. The court upheld the earlier arbitration decision.

A parallel complaint to that of Mr. Herbrand’s was dealt with at pp. 4 & 5 in Marrison et al and Ministry of Correctional Services, PSGB/0004/88, (Emrich). The arbitration board made the following observations:

“The essence of the grievors’ complaint is that since the employer has recognized the inequity of the salary compression problem, its failure to provide a long-term effective solution manifests bad faith and constitutes arbitrary, discriminatory conduct.

While this panel of the Board sympathizes with the grievors’ plight it has reached the conclusion that it lacks jurisdiction to deal with their complaint. As late as October 1987, it is apparent that the employer recognized the need for effective long-term solutions to an inequitable salary compression problem and was searching for means to redress the problem. Subsequently, pursuant to an arbitration award, bargaining unit classes of employees obtained an increase that substantially exceeded the increase granted to management classes, over the I986 and 1987 years. No further increase had been granted to the management classes for the 1988 year as of the date of the hearing. The resultant differential between salaries of supervisors and their subordinates thus became a negative differential by 1988. However, in view of the evidence that effective means are being sought by the employer to address the problem, and evidence that the increases to the bargaining unit were handed down by an arbitration award, rather than by settlement, the Board finds that the grievors have not met the onus upon than to establish discriminatory or arbitrary conduct on the part of the employer or conduct in bad faith. furthermore, the Board finds that this sort of problem, which involves rectification of salary relationships between supervisory employees and their subordinates governed by a collective bargaining regime, is not a matter over which this Board can exercise jurisdiction. It is a matter that is better addressed through the appropriate channels to the Civil Service Commission.

In the result, the grievances are dismissed.” (Emphasis added)

It is noteworthy that the arbitration boards in Marrison et al and Ministry of Correctional Services, supra, and Shaw et al and Ministry of Transportation, supra, both held that they lacked jurisdiction to adjudicate the complaints of the grievors.

It is apparent that the grievor has been financially impacted by the employer’s labour relations practices and application of policy pertinent to this matter. While the board may sympathize with the moral and ethical arguments raised by the grievor, it finds that it has no legal jurisdiction to deal with supervisory salary compression or conversion disputes. The board also lacks the authority to intervene in the employer’s application of the MCP Compression Policy.

Section 50 (1) of Regulation 881 of the Public Service Act (as it then was) provided that:

“Any person may present a complaint in respect of working conditions or terms of

employment to his supervisor within fourteen days of his becoming aware of the

complaint, and the person and his supervisor shall endeavor to resolve the complaint by informal discussion.”

There are no words in the Public Service Act (or in the regulations) that would give it the required legal foundation to adjudicate the grievor’s complaint. Further, the board holds that the arbitral jurisprudence which previously dealt with the same issue is so compelling that the board cannot ignore it.

Based on past arbitral decisions and the Public Service Act itself, the board must reinforce that it is barred from adjudicating the present grievance on its merits. Since the law so clearly prevents the board from dealing with salary disputes, it finds the employer’s timeliness arguments to be immaterial. For all of these reasons the grievance is denied.

The Board wishes to thank the grievor and able counsel for their thorough submissions in this matter.

DATED AT TORONTO THIS 15TH DAY OF MAY, 1996.