P/0027/92

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

J. Handlarski

Grievor

• and -

The Crown in Right of Ontario (Ministry of Finance)

Employer

BEFORE

D. Leighton N. Agarwal

Panel Chairperson Chair of the Board

FOR THE GRIEVOR

J. Handlarski, Grievor A. Chol, Agent

FOR THE EMPLOYER

B. Cristen Counsel Filion, Wakely & Throup Barristers and Solicitors

L. Marvy Counsel Legal Services Branch Management Board Secretariat

HEARING

June 24, 1993 November 17, 1995

INTRODUCTION

Mr. Josh Handlarski began working at the Ministry of Treasury and Economics in March 1988. On November 2, 1992, when he received a letter that he had been released from employment in accordance with s.22(4) of the Public Service Act (the Act), he was working in the position of Treasury Policy Advisor, in the accounting policy section of the Financial Information and Accounting Policy Branch. In a general downsizing and reorganization the Employer eliminated all the positions in the accounting policy unit. Mr. Handlarski’s position was one of the positions abolished. Mr. Handlarski’s surplus period began on November 2, 1992 and was to end May 3, 1993. However, on March 24, 1993 he was redeployed to the Ministry of the Attorney General as a Senior Policy and Planning Officer in the Program Development Branch. His salary and classification remained the same and the appointment became effective April 5, 1993.

Mr. Handlarski filed a notice of grievance with the Public Service Grievance Board (the Board) on November 10, 1992 alleging that “my employment was terminated in a manner contrary to s.22 of the Public Service Act …”. At the hearing on November 17, 1995 counsel for the Employer raised the following preliminary motions:

1. The grievance is inarbitrable as the Public Service Act and its regulations do not provide the Board with the authority to question a review and Ministry’s decision to release an employee in accordance with s.22(4) of the Public Service Act.

2. The grievance is inarbitrable in that the Grievor has since been redeployed and has been placed in another position in accordance with the regulations.

3. The grievance should be dismissed as the matter is moot. There have been no damages.

Counsel argued that s.22(4) of the Act permits a release when there is a shortage of funds. In this case, the Employer, after reviewing the structure of the Ministry, did a major reorganization and downsized. This restructuring eliminated all the employees in the Grievor’s unit. Counsel argued that although this Board has jurisdiction to review a release that may be a disguised dismissal for a cause, we are not permitted to review a s.22(4) release generally and the grievance should be dismissed.

Counsel also argued that, in fact, Mr. Handlarski was never released; although he was given notice, he was redeployed to another ministry within the surplus period. Even if the Grievor was able to show that the release pursuant to s.22(4) of the Act was improper, he had suffered no damages and that this Board could award him no remedy. Counsel relied on Grant (3097/90), a G.S.B. case where the Board held that since the grievor’s request for relief had been granted so that the most she could get was a declaration, the Board declined to exercise its jurisdiction to hear the grievance on the merits. The Board in Grant held that the case was essentially moot. The argument is that even if we found here that there was an improper release, there is nothing that we could order.

The Grievor argues, in response to the Employer’s motions to dismiss this grievance, that his release was a dismissal and, therefore, it is arbitrable. The Grievor alleges that the Ministry transferred him to a newly created position, and then after a time lapse declared that newly created position redundant. He submits that the reorganization was manipulated in a way to disguise his dismissal as a valid release under s.22(4) the Act. He further submits that once being put on the surplus list the Ministry made no attempt to redeploy him, even though there were positions available within the Ministry. He argued that in his new position with the Ministry of the Attorney General he is at greater risk of being declared redundant. Finally, the Grievor argued that redeployment does not fix his complaint. He stated that,

“Even assuming that I am secure in the present position, it is a basic principle of justice that it is not enough to demand from one who did wrong to rectify the wrongdoing. The wrongdoer is expected to be accountable to society and to pay a penalty. Otherwise, there would not be any deterrent for any wrongdoing: if caught or resisted, rectify and end up losing nothing; if not caught or not resisted, the wrong deed remains, in effect, with the wrongdoer left with the gain.”

The damages that the Grievor alleges that he has suffered are legal fees for retaining a lawyer initially upon being surplused and the fact that he is at greater risk in his present position. He argued further that there was a stigma attached to being surplused.

Mr. Chol, acting as Mr. Handlarski’s agent, argued in addition that the evidence would show that an experienced person was pushed out and replaced by a contract employee. He argued that Mr. Handlarski’s position was still in existence one and one half years after the release. He argued that we should hear the case on the merits because management thinks they can do whatever they want in reorganizing a department.

In late January, the Grievor made an additional written submission to the panel. He stated in a letter to the panel that since the hearing on November 17, 1995 new facts had come to his attention. He summarized the new facts and his conclusions as follows:

1. Although my release notice stemmed from the disbandment of the Accounting Policy section, the Ministry of Finance, by its own recent admission, is employing at least one staff member at my classification to deal with accounting policy matters. It made Mr. Henry Goodman as the one for ministries to refer to and receive advice on Accrual Accounting. Accrual Accounting is an area of Accounting Policy which my Accounting Policy group dealt with before being disbanded. As well, Mr. Henry Goodman is one of the accountants who were hired into a parallel position of mine in 1991. It is those excessive hirings of Mr. Goodman and others, during the tough fiscal times of 1990 and 1991, which replaced my colleagues and me. After the hirings and our subsequent so called redundancy, the Ministry purported that the others are doing other accounting work while Accounting Policy was made redundant. Now, even the pretence of not doing Accounting Policy has been removed.

The net result demonstrates the correctness of my claim that the Accounting Policy redundancy was not a cost saving measure but a manoeuvre to replace us with new people under the guise of redundancy.

Hearing would reveal whether there are additional staff members working on Accounting Policy. At the time we were discarded, there were people on contract working on Payments and Deposits, which also was an area dealt with by the Accounting Policy section. Those people continued under their contracts after we were let go. The latest government telephone directory shows those people, after all those years still on staff. Hence, those so called contract people seem as permanent as one can get, doing Accounting Policy work which is purportedly disbanded.

2. While my old area at the Ministry of Finance adds people to work in Accounting Policy and has added, very unusually, a second director for the branch, my existing area at the Ministry of the Attorney General has come since November 17, 1995 under immense pressure to cut expenditures drastically. This demonstrates my claim that the improper actions of the Ministry of Finance towards me have resulted in me being under a lay-off risk much higher than would have been the case had I stayed there.

In response to this submission, Mr. Marvey argued that these were not facts that the panel could take into consideration for the purposes of the preliminary decision. But he went on to state that even if we accepted this evidence, and even if it amounted to bad faith, which, of course, he did not concede, the case was moot because the Grievor was never released from employment and he suffered no damages for which this Board could compensate him.

DECISION

After careful review of the submissions and the cases submitted by the parties, we have decided not to hear this case on the merits. The relevant provision of the Public Service Act is as follows :

s.22(4) A Deputy Minister may release from employment in accordance with the regulations any public servant where he considers it necessary by reason of shortage of work or funds or the abolition of a position or other material change in organization.

Regulation 977 Release from employment provides:

S. 14(1) “Release” means release from employment under subsection 22(4) of the Act.

(2) Where it is proposed to release a full-time civil servant and in any Ministry to which he or she applies there is a vacant position

a) for which he or she is qualified;

b) for which he or she is acceptable to the Deputy Minister of the Ministry; and

c) in the same class as, or in a class with a maximum salary not greater than that of the position occupied by the civil servant.

The Deputy Minister of the Ministry shall transfer the civil servant to the vacant position.

This Board has held consistently that it has the jurisdiction to review a release from employment pursuant to s.22(4) when the grievor alleges bad faith in the decision to release from employment. Trudell (P/006/90), Frith (P/0023/93), McGrath (P/0020/93). The onus is, however, on the Grievor to prove bad faith. It is clear that this Board will not substitute a business decision of the employer with its own. This Board has also held that fairness must be accorded employees, particularly in multi-incumbent positions that are being reduced.

The jist of Mr. Handlarski’s complaint appears to be that he lost his position in the downsizing because the Employer decided the work of his unit was not as important as other functions and was to be eliminated. But that, in fact, accrual accounting, which is what his unit did in part, is still being done by contract people within the newly organized ministry. Even if proved, this would not amount to bad faith. He was not the only person to lose his job: his unit was abolished. Even if the additional facts, as stated in the January 1996 submission, were proved in evidence, there would be no evidence of bad faith. It is a business decision as to which units will be eliminated and as to how the essential work of the Ministry will be performed.

Nothing that Mr. Handlarski has alleged amounts to bad faith. He has given this Board no particulars of bad faith. His argument is that it is bad faith that his position was eliminated and some of that function is still being carried on at his old ministry. This simply is not enough.

Thus, while this Board realizes that it is difficult for an employee released as part of a general downsizing to accept that the release is reasonable, if some part of the function remains, we are also clear that it is up to the employer what business is done and how it is done. The Employer can do what it wants provided the decisions are based on legitimate business reasons. As long as the employer follows its own guidelines in making the cuts, and there is no evidence of bad faith or fundamental unfairness in the method of eliminating individuals the release is proper. A further point, that the Ministry of Treasury and Economics showed no inclination to redeploy the Grievor is no evidence of bad faith. Mr. Handlarski was redeployed to a position in another Ministry at the same classification level and pay. The employer, therefore, satisfied its duty under the Regulations.

This Board has no ground to review a release under section 22(4) of the Act and, therefore, the grievance must be dismissed. Since we have decided to dismiss the grievance on this basis, we do not need to consider the second and third motions before us.

Dated at Toronto this 12th day of November, 1996.