PSGB # P/0186/96, P/0002/97
IN THE MATTER OF AN ARBITRATION
Under
THE PUBLIC SERVICE ACT
Before
THE PUBLIC SERVICE GRIEVANCE BOARD
BETWEEN
Frank Reinholz & Paul Isles
Grievor
- and -
The Crown in Right of Ontario
(Ministry of Environment & Energy)
Employer
BEFORE S.M. Walter Vice Chair
FOR THE Andrew F. Camman
GRIEVOR Counsel Cohen, Highley, Vogel & Dawson Barristers & Solicitors
FOR THE David Strang EMPLOYER Counsel, Legal Services Branch
Management Board Secretariat
HEARING July 11, 1997
INTERIM AWARD
Mr. Isles and Mr. Reinholz launched a joint grievance against the Employer asserting their Area Manager, Western Area, positions (SMG 1 level) in the Ontario Clean Water Agency were improperly eliminated and replaced with Area Vice President level positions (SMG 2 level). Mr. Isles and Mr. Reinholz set out the specifics of their grievance on February 27, 1997 (Exhibit E‑2) by separate letters to Mr. Blair Tully, President and C.E.O. of the Ontario Clean Water Agency and to Dr. Agarwal, Chair of the Public Service Grievance Board:
"This is to advise both the Agency and the Board that I am grieving Mr. Tully's decision in his letter of February 24, 1997 indicating that my position of Area Manager has been eliminated and that I am declared surplus under the Public Services (sic) Act Sect. 22 (4) effective February 24, 1997.
"It is my contention that the position of Area Manager and Area Vice President are the same and that the position of the Area Vice President is my position. Further, the position of Area Manager was wrongly classified at the SMG I level in 1993, and should have been classified at the same level as the Area Vice President at the SMG 2 level, and my annual salary and pension should be corrected accordingly. . ."
Mr. Tully's February 24, 1997 letter to the grievors, as referenced in the February 27, 1997 grievance letter, stated:
"This will confirm that, as a result of OCWA's organizational changes, your position of Area Manager, Western Area was eliminated effective September 24, 1996, and as a result, you are hereby declared surplus in accordance with the Public Service Act Sect. 22(4) effective February 24, 1997.
As a Senior Management Group employee, you have certain entitlements and options that are explained in detail on the attached letter from Mona Cornberg, Vice President, Human Resources.
I would like to take this opportunity to express my appreciation for the contribution that you have made to the Ontario Clean Water Agency and to wish you success in your future endeavors."
At the outset of the hearing, the Employer raised a preliminary objection that the Board lacked jurisdiction to adjudicate the matter. It is the Employer's contention that the Area Vice President positions resulted from restructuring the organization and the position had combined duties that were quite different from the Area Manager position. The Employer submits there was a competition to fill the new Area Vice President positions and the grievors' allegations of unfair competition is "wildly out of time". The Area Vice President positions were filled in the spring of 1996, months before the grievances were filed. Counsel for the Employer submits the President of the Ontario Clean Water Agency has Deputy Minister status as defined in Section 22 of the Public Service Act. Accordingly, it was argued that ss. 22 (4) & (4. 1) were legitimately applied:
"22. (4) A deputy minister may release from employment in accordance with the regulations any public servant where he or she considers it necessary by reason of a shortage of worker or funds or the abolition of a position or other material change in the organization. R.S.O 1990, c. P.47, s. 22(1‑4).
(4.1) A deputy minister may release from employment in accordance with the regulations any public servant who is employed in a position or class of positions that is designated in the regulations on giving him or her reasonable notice or compensation in lieu of reasonable notice. 1995, c. 1, s. 85 (1)."
Counsel also stated that Part V of the Public Service Act Reg. 977 was amended in 1996 and, therefore, ss. 34 (3) prevents the grievors from grieving:
"34. (1) A person described in subsection (2) who is aggrieved about a working condition or term of his or her employment may file a grievance with his or her deputy within 14 days after becoming aware of the working condition or term of employment giving rise to the grievance.
(2) Subsection (1) applies to a person who has been employed in the public service under the jurisdiction of a deputy minister continuously for at least six months before the deadline under that subsection for filing a grievance.
(3) Despite subsection (2), a person in a position for classification set out in Schedule I is not entitled to file a grievance under this section.
(4) The grievance must set out the reasons for the person's complaint about the working condition or term of employment. 0. Reg. 168/96, s. 6 (1)."
(Emphasis Added)
The Employer further argues that ss. 32 (1) is not applicable because there was no discharge
for cause as contemplated by ss. 22 (2):
"22. (2) A deputy minister may for cause remove from employment without salary any
public servant in his or her ministry for a period not exceeding one month or
such lesser period as the regulations prescribe.
- (1) A person who is aggrieved by his or her removal from employment under
subsection 22 (2) of the Act may file a grievance with his or her deputy minister
within 14 days after receiving notice of the removal from employment."
The Employer asserts that ss. 33 (1) has no application to the present matter since there was
no discharge from employment for cause:
"33. (1) A person described in subsection (2) who is aggrieved by his or her dismissal
from employment under subsection 22 (3) of the Act may file a grievance with
his or her deputy minister within 14 days after receiving notice of the
dismissal."
The argument is made that there is no security of tenure under the Act's new regulation, whereas formerly one assumed security of tenure. The Public Service Grievance Board does not deal with grievances where proper notice is given to employees. Persons in the Senior Management Group (SMG) Classification only have the right to grieve if there is employer misconduct (see ss. 23 (2)). The employer argues that misconduct is the only situation where a grievance can be filed. The Grievors do not have the right to grieve because they fall under Schedule I of Reg. 977. See Re Sokol and Ministry of the Attorney General, (Unreported), PSGB, P/0012/94 where the earlier ss, 43 (2) is discussed at p. 8:
". . . On its face, ss. 43 (2), combined with Schedule 1, clearly restricts several classes of Crown employees, including the employment classification that Mr. Sokol belonged to throughout the period in question, from access to the Board with regards to non‑dismissal complaints. . ."
The Employer also asked the Board to consider Re Shapero and Ministry of Education (Unreported), PSGB, P/0035/92 where the grievor was in the SMG classification. The Board in that case stated at p. 8:
"We have no jurisdiction to hear his working conditions grievance and, therefore, grant the motion to dismiss the first grievance."
Finally, the Employer referred the Board to Re Trudell and Ministry of Agriculture and Food (Unreported) PSGB, P/6/90, where Arbitrator Springate stated at p. 13:
"As indicated above, the Board is required to determine whether the grievor was released or dismissed for cause. The fact that the employer called it a release is not determinative. If the employer's reorganization was motivated by a desire to rid itself of the grievor without being required to demonstrate that it had cause for doing so, we would not hesitate to find that what occurred was not a bona fide release but rather a camouflaged discharge. The evidence in this case, however, does not indicate that this is what happened. There is no suggestion that the employer was unhappy with the grievor for some other reason desired to be rid of him. The evidence as to why and how the decision was reached to cut the agricultural engineering service indicated that the focus was on cutting various programs to reduce costs. There is nothing in the evidence which suggests that the employer's focus was on the grievor or in finding a way to terminate his employment."
The employer concluded its argument asserting that, even under the old Regulation 977, there is no scope for arguing that the Board has jurisdiction.
Counsel for the grievors indicated that Mr. Isles commenced employment in October 1971 and entered the SMG 1 classification in 1987. Mr. Reinholz started his employment in December 1970 and also entered the SMG 1 classification in 1987. Both grievors were eligible for "Factor 80" in August and September 1998, respectively. The grievors were Abatement Managers in the Ontario Clean Water Agency, Ministry of Environment and Energy.
The Ministry of Environment phased out the grievors' positions. Both men were offered positions in the Ontario Clean Water Agency (OCWA). Mr. Reinholz in Sudbury, and Mr. Isles in London. Counsel indicated that the interview panel was made up of four individuals. The panel was comprised of Jeff Marshall, President and CEO, Jim Merrit, Vice‑President Operations and two others from the Ministry of Environment and Energy. Each of the grievors had an individual interview with Mr. Marshall. They wanted assurances from Mr. Marshall for their future employment and they claim that such assurances were, more or less, given to them by him.
Counsel for the grievors indicated that internal reviews started in the spring of 1994 because of certain financial inequities surrounding engineers and the grievors. It is alleged that engineers could earn more than a supervisor. Coopers Lybrand provided a report which the Board is asked to have produced, if the hearing proceeds. Counsel maintains that Mr. Marshall didn't like the report and therefore suppressed it. The grievors were told by Mr. Marshall that they should trust him. There was also a second report (Bestco Report) that the grievors requested and received. The report created the Vice President of Corporate Planning (SMG 2) position. Mr. Marshall claimed that the Bestco Report was "cast in stone".
An attempt was made to appoint someone into the Vice President position. Mr. Marshall allegedly discovered that he was unable to simply appoint, so he held a restricted competition. Rob Johnson (who apparently succeeded in the job competition) was a very close friend of Mr. Marshall and was the best man at his wedding. The intention was to replace the Area Managers with the Vice‑President (SMG 2) level position
It is the grievors' position that the SMG 2 position is the same as the SMG 1 position. If this is so, there was no need for a competition. Should the case be heard by the Board on its merits, the grievors will argue the foregoing.
Counsel for the grievors indicated there was a competition for the Area Vice Presidents from February 1996 to June 24, 1996. The grievors operated as Area Vice Presidents on instructions from Mr Marshall, On April 8, 9 & 10, 1996, Mr. Marshall indicated he intended to make the Area Managers Vice Presidents. Mr. Marshall subsequently rescinded his decision. Mr. Marshall met with the grievors and indicated that the interview panel for the competition was made up of Cynthia Webster, Human Resources Consultant, David Bratten, Organizational Consultant, and Jeff Marshall, President and CEO.
Four applicants were interviewed on June 5 & 6, 1996. A fourth interview panel member was used (Mike Thom, Commissioner of Works for Metro Toronto). Mr. Thom's function was to ask technical questions which were deemed unnecessary for the grievors because they had the requisite technical qualifications. The grievors were interviewed on June 7, 1996. Mr. Marshall told them that they are not getting the Vice President position. He had allegedly intimated this before the grievors were actually interviewed on June 7, 1996.
On June 10, 1996 the grievors; were interviewed for the SMG 2, Vice President position. The outside consultants took notes during the interview. Mr. Marshall did not take notes, and did not participate in any meaningful way. He sat sideways and demonstrated total disinterest. Subsequent to the interview with Cynthia Webster, on July 3, 1996 she indicated that the grievors did very well at the interview and their applications were good. However, she stated that neither she nor Mr. Bratten had input into the selection. Ms. Webster stated that Mr. Marshall made the selection alone. The grievors have never received an explanation as to why they were not successful in their application for the Vice President position.
The successful applicants are 30 and 32 years of age, with no managerial experience. There is a close relationship between these individuals and Mr. Marshall. Accordingly, counsel makes two allegations on the grievors' behalf
Positions SMG 1 and SMG 2 are identical. The grievors should have been slotted into the positions.
The competition was a scam. There was no intention to accord a fair opportunity to obtain the Area Vice President position.
The effect of the Employer's decision is that Mr. Reinholz is hanging onto a fill‑in job while attempting to reach Factor 80. Mr. Isles will be without salary for a six month period. It is submitted that the grievors were constructively dismissed. The assertion is made that the Board has authority to deal with a constructive dismissal. In the private sector one gets to negotiate, however, in government it doesn't happen. When the government acts, it acts as the people's representative. It is held to a high standard of good faith and proper motive.
The Board examined the following cases submitted by the grievors' counsel:
Kopij v. Metropolitan Toronto (Municipality), 1996 CanLII 8026 (ON CTGD), 21 C.C.E.L. (2d) 272 (see pp. 283, 285, 286 & 287)
Farber v. Royal Trust Co. [1996] S.C.J. No. 18 (unreported)
Chapman Performance Cars Inc. v. Labour Standards Tribunal (N.S. and Bell) 1992), 16 N.S.R. (2d) 310
Mills v. Alta. (Gov't) (1986), Alta. L.R. (2d) 157
The grievors argue, that where a competition is rigged, you have unfairness. Mr. Reinholz and Mr. Isles were entitled to be fairly considered for the jobs they were applying for. Because the grievors were not properly placed into the positions, they were effectively constructively dismissed. As a consequence of their constructive dismissal, the grievors will have to establish that they should have received the job.
The legislation could never have intended to allow eliminating someone by improperly classifying them. If there is an overt attempt to change a classification, it is an attempt at bad faith. In such a case the legislation allows the grievance to go forward. Fairness and good faith is fundamental. The Employer has a duty to act fairly. It is argued that the position was not abolished. Counsel would have to prove this. Therefore, ss. 22 (4) was applied in bad faith. There is a denial of natural justice. The employer failed to act fairly and no abolition of the SMG I position occurred in substance.
The Board is asked to dismiss the Employer's preliminary objection. If the objection is dismissed, the Board should compel the Coopers Lybrand Report and notes taken during the job competition.
In reply, the Employer argued that the Public Service Act determines the rights of employees. Judicial review is handled by the courts. The Board has no jurisdiction to handle constructive dismissal. The Board's jurisdiction arises out of ss. 32, 33 and 34. The grievors' allegation about an unfair competition is over a year old. It was never raised before the hearing. There was no constructive dismissal. The grievors are being bridged to Factor 80 and have received notice of termination. The grievors are Schedule I employees and, therefore, not subject to grieve. The SMG I position ceased to exist and the SMG 2 position is a different position. Section 22 (4) was applied.
Decision
The Board has carefully examined the documentary evidence and arguments. Based on that information, it is apparent the grievors object that:
The Employer eliminated the Area Manager position effective September 24, 1996 (see Exhibit E‑3. P. 2).
They were declared surplus in accordance with the Public Service Act, ss. 22 (4) effective February 24, 1997.
The Employer did not view the Area Manager SMG 1 position and Area Vice President SMG 2 position as being the same.
The Area Manager position was wrongly classified at the SMG 1 level in 1993 and should have been classified at the Area Vice President SMG 2 level.
The Employer did not apply the pay difference between the SMG I and SMG 2 classification to their annual salary and pension.
The facts show the employer exercised its right to reorganize its operations by replacing the Area Manager position with the Area Vice President position. The change was effective on September 24, 1996 and the grievors were well aware of the change in 1996. The Board has no evidence indicating the grievors formally objected to the Employer's elimination of the Area Manager position, or the propriety of the subsequent recruitment process for the Area Vice President position, before February 27, 1997.
If the grievors' assertions are correct that the Employer's elimination of the Area Manager position was malicious, or that the selection process for the Area Vice President position was a "scam", the grievors had a duty to file a grievance within 14 days of becoming aware of the matter giving rise to the grievance. The grievors knew for approximately seven months that their position was abolished, and they also knew the Employer recruited individuals for the Area Vice President position. Notwithstanding their clear knowledge of the situation, they did not grieve until February 27, 1997. Boards of arbitration have held, in other cases, that grievors ought not necessarily be strictly held to filing grievances within the 14 day legislative requirement. Where such discretion is given, it must be demonstrated that an undue delay in filing a grievance occurred for a good and sufficient reason. The present Board has no evidence showing any good reason why the grievors unduly delayed the filing of their grievance. In the absence of such information, the Board cannot, and will not, extend the 14 day limit for filing a grievance in this instance. To do so without good cause would be inappropriate.
The assertion that the grievors were constructively dismissed was raised at the hearing, but not in the original written grievances. Even if the Board were to accept that the issue of constructive dismissal was part of the grievance filed on February 27, 1997, it has absolutely no jurisdiction under the Public Service Act to deal with the matter.
The Board notes that the grievors were surplused in accordance with ss. 22. (4) of the Public Service Act. They were not discharged for cause. The evidence is that the grievors fall under Schedule I and, therefore, do not have the right to grieve unless the Employer engaged in misconduct. The grievors did no convince the Board that the Employer maliciously surplused them. Indeed, the Employer exercised a right set out in ss. 22. (4) by providing notice and compensation to the grievors.
Since the grievors clearly failed to grieve the earlier alleged misconduct of the Employer within 14 days of them having knowledge, or providing a good and sufficient reason for the delay, they cannot now seek redress for the alleged transgressions of the Employer. If it were otherwise, grievors could wait years before deciding whether to grieve a matter.
The grievances are dismissed.
DATED this 29th day of October 1999, at the City of Toronto, Ontario.