P-2004-1721

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

Mark Drakos

Grievor

• and -

The Crown in Right of Ontario (Ministry of Community Safety and Correctional Services)

Employer

BEFORE

Kathleen G. O’Neil

Vice-Chair

FOR THE GRIEVOR

Mark Drakos

FOR THE EMPLOYER

Sean Kearney Senior Counsel Ministry of Government Services

HEARING

June 16, 2006.

Decision

This decision deals with the grievor’s claim that his salary has been incorrectly calculated. In a preliminary decision dated December 22, 2005, the Board found there to be an arbitrable issue between the parties as to the nature and duration of a pay adjustment promised by senior management, and accordingly dismissed the employer’s preliminary objection, affording the grievor the opportunity of a hearing on the merits,

The Facts

Mr. Drakos, the grievor, secured a full time Operational Manager (0M-16) position in December 2001, having served in an acting capacity on various occasions between 1992 and 2001. January 2001 was established as his anniversary date. Other Operational Managers had career paths which meant that they were technically members of the OPSEU bargaining unit on January 1, 2002, and thus received the January 1, 2002 OPSEU pay increases prior to promotional increases. The result of this was that later promoted managers were earning more than the grievor was after having been a manager for almost a year. This situation was a source of discontent to him, and other similarly situated Operational Managers to which Ministry management responded with a pay adjustment. Mr. Drakos grieved, claiming that he had not gotten the full benefit of management’s response to the problem. He says he is entitled to a salary increase of 3%, rather than a lump sum payment representing 3% over the 2003 Correctional Officer salary for a limited period of time, as he has received.

As set out in the preliminary decision, the grievor bases his claim on a series of communications from the employer. The first letter, dated June 4, 2004, is from Mr. Gary Commeford, Assistant Deputy Minister, Adult Institutional Services in the Ministry of Community Safety and Correctional Services. As the letter, addressed to Mr. Drakos, as well as a number of other Operational Managers, is central to the dispute between the parties, it is useful to set out the body of the letter in its entirety:

Re: Adjustment to Salary

As you may be aware, the Ministry has been reviewing a number of compensation related issues impacting the Operational Managers. I am writing to notify you that as a result of this review you have been identified as being eligible for a salary adjustment.

The situation arose as a result of compliance with OPS compensation policies. As such, there was no breach of policy that can be cited as a reason to amend the pay treatment of Operational Managers affected by this scenario, However, senior management has decided that a pay adjustment is appropriate for these individuals.

In order to address this situation the Ministry has decided that the salaries of the Operational Managers hired during the mass recruitment initiative in late 2001 will have their salaries adjusted to 3% above the 2003 Correctional Officer salary, retroactive to April 1, 2002.

Our review of Ministry records indicates that you are eligible for the above-mentioned adjustment and will receive $4,537.77. I expect that these changes to compensation will be implemented during the next six to eight weeks.

This adjustment is made on a without prejudice or precedent basis and in no way is it meant to suggest that the ministry is contemplating adjustments in other cases where an overlap exists.

On June 18, 2004, the grievor commenced an e-mail correspondence with Viki Scott, Eastern Region Human Resources Senior Consultant, concerning various questions he had about his pay. On June 29, 2004, in one of her responses to him, she directly addresses the grievor’s concerns about his salary as follows:

I have clarified the issue involved in your compensation.

Please note that your salary will not change as a result of the payment, but you will be receiving the lump sum as indicated in your letter. I have clarified this following my email below – and seeking further information on the details of the compensation memo.

As such, your current salary will stay unchanged until 1) any applicable P4P [pay for performance] is applied retroactive to April 1, 2004 and 2) any applicable across the board increases retro to April 1, 2004 are applied. I do not have any information at the moment regarding these increases.

The grievor replied on June 30, 2004 referring to Mr. Commeford’s letter and posing the question: ”Are you telling me that HR [Human Resources] is not going to give me what Mr. Commeford has promised in his letter?”

Ms. Amlin replied in turn on July 5, 2004, as follows:

There are two somewhat separate pieces here from Mr. Commeford’s memo – the adjustment (to 3% above the 2003 Correctional Officer salary, retroactive to January 1, 2002) and ensuring that “institutional managers confirmed as of July 2003 will be compensated 3% above the current CO rate.”

The “adjustment” that you are receiving, and referenced in Mr. Commeford’s individual letter to you, is the payment (or adjustment) that brings you to 3% above the 2003 CO salary, retroactive to January 1, 2002.

As of July 2003, you were already compensated higher than 3% above the current CO rate. As such, there is no further adjustment to your salary. If your salary as of July 2003 was less than the current CO rate, than a salary increase would apply.

As such, you are receiving the full compensation promised in Mr. Commeford’s letter. I hope this information offers further clarification.

In the middle of the period spanned by the e-mail exchange with Ms. Amlin, the grievor received a letter dated June 22, 2004, from Kate Karn, another Human Resources employee, advising the grievor of an amendment to the letter sent to by Mr. Commeford regarding the adjustment to his salary. This letter amended the retroactivity date to January 1, 2002, but confirmed that the dollar amount was correct, and ended with the following two paragraphs:

Although the wrong date was referenced, the dollar amount identified in the original letter was accurate as the calculations were determined using the January 1, 2002 date. The retroactive salary differential will be reflected on your June 30^th pay as a lump sum payment.

We apologize for the error in communication.

The final letter referenced by the grievor is dated July 13, 2004, signed by Kate Karn, as Acting Manager, Human Resources Policy & Programs, which reads as follows:

Re: Adjustment to Salary - Clarification

I am writing to provide further clarification on Gary Commeford’s letter dated June 7, 2004, regarding the timing of the mass recruitment drive, its impact on you and how the lump sum payment was calculated.

The Ministry recently decided that Operational Managers hired during the mass recruitment initiative, in late 2001, would be compensated with a lump sum payment equivalent to the difference between their actual earnings and 3% above the 2003 CO salary of $53,421 retroactive to January 1, 2002.

Your bi-weekly pays from January 1, 2002 to March 31, 2004 were reviewed. Beginning January 1, 2002, your actual bi-weekly earnings (e.g., regular earnings, overtime, etc.) were compared to the bi-weekly earnings of the new CO2 2003 salary rate plus 3% ($25.59/hour or $53,421/annum). During the bi-weekly review period, if you earned less than $25.59/ $53,421 then, you received the difference between the two rates on all hours worked over the 2-week period. Once your salary was equivalent to or exceeded $25.59/ $53,421 the review ceased.

Should you have any additional questions please raise them with your Superintendent and he will contact your HR Consultant.

In the grievor’s view, the adjustment described in the clarification letter was much less than what Mr. Commeford had promised. In order to receive the benefit of that promise, Mr. Drakos says that the adjustment should have been “rolled into” his salary, rather than treated as a temporary top-up, paid out in a lump sum. The grievor takes the position that the employer’s offer of a salary increase became a term or condition of his employment, and that he is not being treated fairly because the employer’s interpretation of the new salary adjustment is arbitrary. The grievor invites the Board to find that Mr. Commeford’s letter acknowledged that there were pay inequities in relation to his peers, and promised as a solution that his salary or annual wage would be adjusted.

The grievor states that Mr. Commeford, as an Assistant Deputy Minister at the relevant time, would have had the authorities of a Deputy Head. In this respect, he refers to the statement on page 13 of the Pay on Assignment Operating Policy which states:

Deputy heads are responsible for establishing ministry operating procedures and delegating authorities to managers on discretionary pay decisions.

The grievor also relies on the following statement from page 3 of the same policy, which he maintains is contradicted by the employer’s position that he is only entitled to a lump sum:

Employees should be paid equitably in their assigned salary ranges taking into account such factors as skills and job-related experience, relationships to peers and career progression.

As well, the grievor makes reference to page 10 of the same policy which provides for a promotional increase where an employee’s position is reclassified retroactively, and that all subsequent transactions should be recalculated in the new higher salary range. The grievor takes Mr. Commeford’s promise of a salary adjustment as a retroactive reclassification, which should result in such a recalculation of all subsequent transactions, including Pay for Performance. He characterized the $4, 537.77 mentioned in the letter as a retroactive payment, and is looking for what he considers the full value of the adjustment as remedy. In this respect, the grievor asked for a payment of $34,022.98, that his salary be adjusted to the top of the salary grid effective September 25, 2005 and all retroactive money owed to be paid out. He asked that all similarly affected Operational Managers be compensated accordingly. As well he seeks compensation for his travel to the Board, and time spent in preparing his case and consideration of the effect this dispute has had on his family.

Referring to the July 13 letter from Kate Karn, the grievor emphasized that it came from Human Resources, rather than the employer. He notes that the letter says that it is the Ministry, rather than the employer, who recently decided that OM-16’s would be compensated with a lump sum payment equivalent to the difference between their actual earnings and 3% above the 2003 CO salary. It is the grievor’s view that the third paragraph of the letter is a further statement he was to be compensated 3% above the going rate of a Correctional Officer based on a biweekly pay.

The grievor also referred to old policies that he says would have eliminated the problems with the OM-16 pay scale, one of which clearly provided that Operational Managers were to be paid at least 3% above their subordinates. However, he stated that the employer removed all these clauses when they rewrote the policies.

In his submissions, the grievor mentioned a number of other elements of his individual experience as well as the treatment of all managers in the OM-16 class with which he is dissatisfied, some of which focus on terms and conditions of the collective agreements for members of the OPSEU and AMAPCEO bargaining units, others of which are related to the compensation of senior management or the practices of Human Resources. This decision only deals with those issues necessary to the resolution of the grievance before me, which deals with whether the grievor is entitled to a lump sum payment, or an adjustment to his salary base.

Employer counsel argues most fundamentally that the letters should be interpreted quite differently than the grievor does, and that they simply do not support his claim to a permanent adjustment to his salary. In the employer’s view, the Ministry offered a series of gratuitous lump-sum payments with no clear authority to do so, in an effort to address the issues of the discontented managers. Counsel underlines that even the first letter makes reference to a lump sum, in a dollar amount, and does not make reference to an ongoing salary rate with enough precision to be enforceable. As well, the letter was written on a “without prejudice” basis.

Further, employer counsel underlines that there was no reclassification, as argued by the grievor. As well, counsel submits that although one might appreciate the disgruntlement of Operational Managers negatively affected by the timing of their promotions, the evidence does not support the remedy the grievor is seeking, as the fact that someone else’s salary goes up more than yours does not, without more, entitle a grievor to a salary increase.

Employer counsel urges the Board to find that there has to be a mechanism by which a grievor becomes entitled to a salary increase, reflected in policy or statute. The uncontradicted evidence of Ms. Risa Caplan, Corporate Compensation Specialist, was to the effect that Deputy and Assistant Deputy Ministers do not have the authority to change salary rates or ranges of any employee. Referring to a document entitled Salary Rates and Ranges Directive”, she underlined that there is a specific, well-established process involved, which requires at page 3, under the title Mandatory Requirements:

All salary rates and ranges must be approved by the Lieutenant Governor in Council, subject to recommendation by the Civil Service Commission/Management Board Secretariat for management and excluded classes.

Ms. Caplan noted that Management Board Secretariat was the name of the former central agency in the government, but it has been succeeded by the Ministry of Government Services, where she works. The same directive outlines the responsibilities of Ministries, which significantly do not include authorizing salary adjustments. She also underlined that the Rates and Ranges Directives does not speak to individual pay treatment, which is covered by the Pay on Assignment Operating Policy. That policy lays out certain pay treatments to be approved by Ministries when there are specific employee transitions, such as new hires, temporary assignments or return from leave.

In contrast to the way pay on assignment is handled, Ms. Caplan indicated that each salary increase comes out in the form of an Order-in-Council which revokes the previous salary provision and authorizes a new one. For example, there was a general increase to the salary scales effective April 1, 2004 and 2005, which included the OM-16 salary grid, which remains in effect until it is superseded by another Order-in-Council with another salary schedule.

Ms. Caplan testified that a reclassification occurs when there has been an addition or subtraction of duties to a position, such that a different rate of pay is appropriate, for instance where the duties of a position are impacted significantly by technical change. She noted that in such a case, the individual employee has not moved anywhere in the civil service, but his or her duties have changed. If the reclassification is to a higher salary scale, it is treated as a promotion for pay purposes. She said that this is not what occurred in Mr. Drakos’ case; there was no change of duties or reclassification for those in the OM-16 class

As to Mr. Drakos’ reliance on the portion of the Pay on Assignment Operating Policy which refers to equitable treatment within the salary range, she testified that this comes into play when an employee is entering the wage scale. For example when someone is hired from outside the Ontario Public Service, a manager would have the flexibility to offer the employee a salary within the range, which took into account the new hire’s skills and experience. As well, the Ministry has authority to approve a promotional increase over 3% where necessary to bring a manager up to the minimum of the new salary range.

Employer counsel also submitted that the documentation shows that the grievor was not treated arbitrarily. Counsel refers to the July 7, 1998 decision of this Board in Scott et al. and the Crown in Right of Ontario (Ministry of Transportation) (Lynk) at page 26 for the proposition that communications from a Ministry without any indication of a change in policy does not result in an enforceable amendment to terms and conditions of employment. Further, counsel argues that the policy for setting salary is very clear, and the employer does not have the power to ignore its own policies. In support of this proposition, counsel refers to page 20 of the April, 1998 decision of this Board in Mously, Lister, Watson and the Crown in Right of Ontario (Ministry of the Solicitor General and Correctional Services) P/0068/96, P/0171/96, P/0172/96 (Leighton). Here, the process for setting salaries is described in the statute and overriding policy, and therefore, salary cannot be revised by a Ministerial directive, in counsel’s submission. If it could be, then managers could unilaterally decrease salaries as well without following the proper procedure, in the employer’s view.

Counsel argues that there has been no proof of a clear breach of an existing policy or statute, or of bad faith, discriminatory or arbitrary conduct. Ministry staff went through every aspect of the calculation of the adjustment, analyzing every pay period, which is the opposite of arbitrariness. Finally, employer counsel argues that in the absence of any proof that anyone else received the adjustment rolled into salary, there is no foundation to the grievance.

The grievor’s main contention is that the employer should make good on the word of the Assistant Deputy Minister to the effect that his salary would be adjusted to 3% above the 2003 Correctional Officer salary, retroactive to April 1, 2002. He takes the word “salary” to mean his annual, ongoing base rate. And that is certainly an understandable interpretation of the third paragraph of Mr. Commeford’s June 4, 2004 letter, set out above. However, and unfortunately for the success of the grievor’s claim, the rest of the evidence is persuasive that the employer meant something different, and less, as its response to the discontent among the Operational Managers

When reading the June 4 letter closely, several things become apparent. Firstly, there were a number of compensation issues under review by the employer. The differential between the Operational Managers and those reporting directly to them was at times the main focus of the grievor’s attention. However, Mr. Commeford’s letter, in the second paragraph, focuses on the different but related issue, which was also central to this grievance: the fact that due to the timing of the mass recruitment in November/December 2001, some Operational Managers were being compensated at a lower rate than that of Operational Managers hired in 2002. This is an issue of comparison with other Operational Managers, not with the rate of members of the bargaining unit. However, it is related to a comparison with members of the bargaining unit because it is the fact that new Operational Managers who were promoted later than December 2001 left the bargaining unit with the January 1, 2002 increase already in their base salary which caused the problem in comparison with other Operational Managers. When the 3% promotional increase was applied to that, it created a higher salary than someone promoted even a day before the increase, who left the bargaining unit with a lower base, to which the promotional increase was then applied. As Mr. Commeford’s letter points out, that sequence did not represent a breach in policy; it was a result of the application of policy. Each Operational Manager received the promotional increase applied to his or her pre-promotional base.

The letter then says that “this situation”, i.e. the fact that later promoted Operational Managers were being paid more than those promoted earlier, would be addressed by adjusting the salaries of Operational Managers hired during the mass recruitment initiative late in 2001 to 3% above the 2003 Correctional Officer salary, on a retroactive basis. Nothing is said about the future treatment of salary, although of course the word salary, in its ordinary meaning connotes a regular payment that goes on into the future as long as the person is employed. It is notable. however, that the terms used in the letter change from the third paragraph to the fourth. The term “pay adjustment” in the third paragraph does not as easily bear that ongoing connotation. And the lack of an end date in the June 4 letter did nothing to clarify whether it was intended to be ongoing or not.

It is important to note that, when looked at in light of the problem that Mr. Commeford’s letter states it was trying to solve, it appears that the retroactive adjustment was intended to have the effect of putting the Operational Managers hired before the implementation of the bargaining unit increases into the same position as those hired later. That is, the relationship the employer was trying to re-establish was not with the salaries of the bargaining unit, but with that of other Operational Managers promoted shortly after January 1, 2002. In the context of communication to a group already disenchanted with the relationship of their salary to that of the bargaining unit, it is unfortunate that the comparison was expressed as a relationship with the bargaining unit salary, as it left open the impression that the grievor received. Still, expressing the adjustment in terms of the bargaining unit salary is also understandable, since it was the higher bargaining unit salary base of the later promoted managers that caused the problem in the first place.

The letter continues to make a specific statement of how much the grievor is entitled to, a dollar amount that was paid out to him. However, given his understanding about what the previous paragraph had promised, he concluded it was not calculated correctly, as his grievance claims. The letter then goes on to say that the changes to compensation will be implemented during the next six to eight weeks. This wording very likely also contributed to the impression that there was to be an ongoing change to compensation, rather than a single pay-out of one lump sum.

However, the six to eight week time frame had another effect: it opened a window of time before which the promised adjustment was to be implemented, during which the employer did a much more effective job of communicating what the intended adjustment actually was. It is the Board’s finding that the confusion caused by the unfortunate wording of the June 4 letter was very adequately cleared up before that target implementation date, so that by the time the correspondence referred to above was finished, there is little doubt about the amendment to compensation that the employer was offering. It was not an ongoing adjustment to the salary base intended to continue indefinitely into the future. It was a one-time lump sum, representing a temporary top-up, or bridging provision, until the grievor’s individual progression within the managerial salary grid reached a level equivalent to 3% over the 2003 CO2 salary rate. This is explained over the series of e-mails from Ms. Amlin, and also clearly stated in the July 13, 2004 letter from Ms. Karn. The June 22 letter also went some distance to clearing up the confusion, although it repeats the problematic wording “adjustment to salary”. This was mitigated somewhat by the statement in the final paragraph that the retroactive salary differential would be reflected on the grievor’s June 30 pay as a lump sum payment. The June 22 letter also apologizes for the error in communication of the retroactive date. In hindsight, it was a much more minor misstep in communication than the impression created by the reference in the June 4 letter to a salary adjustment defined as a relationship to the bargaining unit pay rates. There are many examples in the Board’s jurisprudence of the employer’s efforts to disabuse managers of the mistaken idea that their compensation package is tied to that of the bargaining unit, but the June 4 letter can be read as perpetuating exactly that idea.

In order to succeed in his grievance, Mr. Drakos would have to show that it was a term or condition of his employment that he was to receive an ongoing amendment to his salary. If he could show that, then the Board would be in a position to enforce that term or condition of employment, and award him a remedy. As a matter of contract law, this would require that both he and the employer had agreed on an ongoing change to his salary as a term of his employment. In legal language, it is said that there must be consensus ad idem, which is a Latin term meaning that the parties have agreed to the same thing. The evidence is very clear that, by July 13 at the latest, the employer had clarified that what was being offered was a lump sum payment, which the grievor has since received, rather than the ongoing salary increase that he believed he should receive after reading Mr. Commeford’s letter. In the result it is my finding that the employer did not offer or agree to the same thing as the grievor is claiming. Therefore, it did not become a term or condition of his employment which the Board is in a position to enforce. As well, in the circumstances, the evidence does not establish that the grievor’s treatment was arbitrary, as he received the intended adjustment to his pay, the calculation of which was verified by Human Resources in the process of answering his questions.

The grievor argued that Ms. Karn did not have the requisite level of authority to overrule the promise made by Mr. Commeford. Firstly, the communications from Human Resources are not inconsistent with the June 4 letter, although they are clearer as they were responding to the grievor’s questions. Further, there was no evidence beyond the grievor’s assertion to establish that there was anything out of the ordinary in the idea that Human Resources staff would clarify the employer’s offer of a pay adjustment. More importantly, there is no evidence from Mr. Commeford or anyone identified by the grievor as having authority, which would support the grievor’s version of the pay increase offered by the employer. Nor is there any evidence to the effect that the employer is bound to communicate everything through the same person.

Given that the grievance is not successful even if Mr. Commeford had the authority to make the salary adjustment claimed, it is unnecessary to deal with the employer’s arguments that he lacked the requisite authority to promise salary adjustments.

In the result, for the reasons set out above, the grievance is dismissed.

Dated at Toronto this 25^th day of August, 2006