P-2007-2730

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

Hollinger

Complainant

• and -

The Crown in Right of Ontario (Ministry of Environment)

Employer

BEFORE

D.J.D. Leighton

Vice-Chair

FOR THE COMPLAINANT

David Hollinger

FOR THE EMPLOYER

Jennifer Richards Ministry of Government Services Counsel

HEARING

May 26, 2009.

Decision

Introduction

1On September 7, 2007, Mr. Dave Hollinger, who at the time of his grievance was a supervisor with Water Resources Technical Support Section of the Ministry of Environment, grieved that his working conditions and terms of employment had been violated. His grievance alleges that a salary compression between himself and two of his subordinates, who were Ground Water and Surface Water Group Leaders (Geoscientists 4), began in January 1, 2002. It was the grievor’s position that anything less than a five percent difference from the maximum salary range of a manager or supervisor and a direct report created a salary compression. In order to remedy the compression he sought an increase of his salary of ten percent per year, retroactively to 2001. This was because the Geoscientists 4 salary exceeded his own by up to five percent in many years. Mr. Hollinger acknowledged that he received a onetime compression payout for the years April 1, 2002 to March 31, 2004. However, it was his position that it was insufficient to remedy the salary compression. He also took the position that this pay should have counted for the purposes of his pension. Mr. Hollinger retired at the end of 2008.

2At the outset of the hearing, the employer made a preliminary motion to dismiss the grievance as not arbitrable. Counsel for the employer submitted that this board has no jurisdiction to rectify salary compression. She stated further that the grievor was simply taking the position that the employer had done nothing to address the compression issue. He was not alleging any breach of a specific policy. Nor was he claiming discrimination or arbitrariness on the employer’s part by not maintaining a five percent differential.

The Evidence

3The employer called Ms. Risa Caplan, a corporate compensation specialist, to give evidence as to how salary was set for management employees outside a bargaining unit. Ms. Caplan testified that salaries were set by the government and that there are no negotiations with employees for salaries outside those that are represented by bargaining agents. She also noted that there was no automatic link from raises for the bargaining unit to management salary increases. Factors that influence salaries are political will, political affinity (that is whether there is a political interest within the public service), provincial finances, public perception, trends in the broader sector, or in the bargaining units as to salary. There is no policy for non-bargaining unit employees that requires an increase to salary at any particular time. It is completely up to the government in this case, not the ministries, to increase management salaries.

4Ms. Caplan described the process of salary increases for the Management Compensation Plan (MCP) and non- bargaining unit employees. Her comments did not refer to the process for salary increases for senior management employees. Approvals for a pay increase begin with a specialist on pay analyzing what might be appropriate. The proposal is vetted through senior officials up through the ADM and then to the Civil Service Commission for approval. Compensation changes are approved by Cabinet. The method of approving a salary increase was provided in the Public Service Act, at the time in question.

5Ms. Caplan testified that the employer addressed the issue of salary compression in 1991. The employer had a temporary policy on compensation for compression issues for approval of increases for 1991 and 1992 only. In 1991 there was no certainty that this policy would be extended beyond 1992. Management Board did approve a continuation of salary compression adjustments, existing prior to June 14, 1993. Social Contract legislation and other agreements then ended salary compression adjustments for management employees after June 14, 1993. When social contract ended, the government reaffirmed on May 29, 1996 that there would be no compression pay for anyone after June 14, 1993. Anyone who met the 1991 criteria for getting compression pay that still had not received it was still eligible, but nobody after May 29, 1996 would receive any compensation for compression.

6In 2002, the employer addressed the issue of salary compression again. Ms. Caplan said that a new OPSEU collective agreement and special adjustments to the salaries of some classes which reduced the salary range between OPSEU members and their direct reports triggered the employer’s analysis of the compression issue. The government decided to issue a temporary policy effective April 1, 2002 that provided as follows:

compression pay is being reinstated for the period April 1, 2002 to March 31, 2004 for managers (ie. those exercising managerial authority over others) in the management compensation plan (MCP) to maintain a five percent differential between the salary range maximum of managers and the salary range maximum of their direct reports.

The policy directive also noted that compression pay was intended to address individual temporary compression situations that may arise and that it would not affect salary ranges for MCP. Ministries were encouraged to review any salary compression issues, but they were not required to do so under the policy. The directive also noted as follows:

any compression adjustment will stop in any circumstance where, as a result of a transfer of employees, promotion or for any other reason, the differential between the maximum of the salary range of an MCP manager and his/her direct reports is equal to or greater than five percent, or, on March 31, 2004, whichever is earlier.

The 2002 compression pay policy also included many exceptions, particularly professionals working in the MCP. Ms. Caplan testified that currently, there is no compression policy in existence and that there is no entitlement to an ongoing differential of five percent between a supervisor and a direct report.

7Mr. Hollinger did not tender any evidence.

The Employer’s Submission

8Counsel for the employer argued that the board had no jurisdiction to hear this case. She submitted that the Public Service Act, R.S.O. 1990, c. P.47 (as amended) gave the exclusive jurisdiction to classify and recommend salary ranges for management employees to the Civil Service Commission. The grievor is asking for the board to review his salary and there is no jurisdiction to do so. She argued that many factors are considered in setting salary, but it is the exclusive right of the Commission to set managers’ compensation. Two directives in the past, one in the early 90s and one in 2002, addressed issues of salary compression, which occurs when a manager makes less than five percent more than the direct report he or she supervises. Both of these policies were temporary. Without a policy, counsel argued, there is no ongoing entitlement to a five percent differential in pay.

9Counsel pointed out that this board has interpreted terms of employment and working conditions broadly. However, this is not a case that alleges that salary has been calculated incorrectly or that there is a breach of a statute or policy. Counsel contends that the grievor is essentially claiming that it is not fair that the people he supervised made more money than he did. Counsel for the employer relied on the following cases in support of her submission: Davies and Ministry of Correctional Services (1983) PSGB 921-83 (Black); Smalley and Ministry of Correctional Services (1986) PSGB 0013-85 (Emrich); Coons et al. and Ministry of Correctional Services (1988) PSGB 13-87(Brent); Herbrand and Ministry of Transportation (1995) PSGB 0014-94 (Walter); Garratt et al. And Ministry of Health and Long-term Care (2005) PSGB 2003-1670(O’Neil); Harris et al., and Ministry of Community Safety and Correctional Services (2005) PSGB 2003-1479 et al. (O’Neil).

The Grievor’s Submission

10Mr. Hollinger argued that there are board decisions that have taken jurisdiction where grievances have challenged the employer on a salary related matter if the employer’s decision on salary was made in a discriminatory, arbitrary or in bad faith, or in violation of governing legislation, a policy, guideline, or practice that would have legal effect as part of an employee’s terms and conditions of work. Mr. Hollinger argued further that there was a policy in place at the time he is grieving and the employer has acted arbitrarily and/or inconsistently in maintaining a five percent differential between himself and his direct reports. He argued that the employer must comply with its own policies. In sum, Mr. Hollinger argued that where there has been an allegation that there has been a breach of a working condition or term of employment in this case, that a policy which formed a working condition or term of employment has been breached, the board must adjudicate. He argued that this is consistent with prior rulings of the board which held that salary compression grievances without further allegation of a breach of working condition either by bad faith or discrimination, arbitrariness, breach of the act, regulation or the policy are not arbitrable. Thus, the grievor contends that a complaint merely about salary compression would not be arbitrable. However, once a policy is in place it should be applied fairly and consistently and in Mr. Hollinger’s view it was not in his case. Mr. Hollinger relied on the following cases in support of his submission: McConnell et al. and Ministry of Transportation (1997) PSGB 0051-93 et al. (Leighton); Gleason and Ministry of Transportation (1997) PSGB 0040-92 (Leighton); McLuhan and Ministry of Transportation (2002) PSGB OO53-93(Maeots); Garratt et al. (2005) PSGB 2003-1670 (O’Neil).

Decision

11Having carefully considered the submissions of the parties I must conclude that I have no jurisdiction to hear this case in the circumstances. The evidence shows that there is no working condition or term of employment that managers must make more than their subordinates. While it may be a good practice to do so, there is nothing in the legislation or any other provision that requires it. Indeed, the Public Service Act gives the Civil Service Commission the exclusive right to set salary ranges for managers. The most recent policy on salary compression, effective April 1, 2002 to March 31, 2004 was completely discretionary and did not change salary ranges for MCP. Ministries were not required to pay employees in a salary compression with subordinates. The policy provided that “compression pay is intended to redress individual temporary compression situations that may arise, without affecting the salary ranges for MCP”.

12Mr. Hollinger acknowledges that he received some adjustments under it but that it was not enough. He makes the allegation that pay should have been adjusted for the years from 2002 until his retirement in 2008. However, the policy was only in effect for April 2002 to March 2004. Moreover, the policy was not intended to amend the salary range so that the most an employee got was a top up for the time between April2002 and March 2004. This therefore did not count for pension purposes. Taking Mr. Hollinger’s allegations as true, there is no breach of the 2002 Compression Policy.

13Most importantly, there is no allegation here of discrimination, arbitrariness or bad faith. The grievor simply asserts that for the years in question it was unfair and arbitrary that he made less than his subordinates. Thus, I am convinced that proceeding with this case would serve no purpose. The board has no jurisdiction to hear the case on the merits. The grievance is therefore hereby dismissed.