P-2013-1036

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

Candace Kaine

Complainant

• and -

The Crown in Right of Ontario (Ministry of Children and Youth Services)

Employer

BEFORE

Kathleen O’Neil

Interim Chair

FOR THE COMPLAINANT

Candace Kaine

FOR THE EMPLOYER

Peter Dailleboust Ministry of Government Services Legal Services Branch Counsel

SUBMISSIONS

April 17, 2014

Decision

1This decision deals with preliminary objections made by the employer, asking for the dismissal of the grievance of Candace Kaine, a Probation Manager employed in the Ministry of Children and Youth Services. The primary basis for the objection is that the complaint relates to pay for performance, a matter outside the Board’s jurisdiction. The complainant asks that the matter be allowed to proceed as a breach of terms and conditions of employment in respect of Managers’ wages, and unfairly applying a method of compensation administration that differs from other employees in the public service.

2Further to the employer’s request and Ms. Kaine's agreement, the Board directed that the matter be heard by way of written submissions. The Board received detailed submissions in response to that direction.

Does this Decision Apply to a Group?

3About the same time Ms. Kaine filed her complaint with the employer, several other managers in her area filed similar or identical complaints as well. The Deputy Minister’s designee met with a group of them on June 5, 2013 to address the grievances, and a common response to the complaint was issued to Ms. Kaine and six other managers. Ms. Kaine was not satisfied with that response, and advanced her complaint to this Board. She signed it individually, but noted in it that all managers were affected by the Pay for Performance compensation package. She did not refer to it as a group grievance or assert that she represented anyone but herself.

4In reply to the employer’s written motion, Ms. Kaine made submissions entitled “P-2013-1036 Kaine (and eight others) vs. MCYS” and made a number of references to a group of managers. She identified the others in the group by name and as Probation Managers and Assistant Probation Managers in the Ministry of Children and Youth Services, Eastern Region. The Board had received individual complaints from six of those, which were similar or identical to Ms. Kaine’s. Each of those had been advised that their complaints would be put in abeyance pending the outcome of her complaint.

5When employer counsel received Ms. Kaine’s written submissions, he objected that Ms. Kaine was attempting to expand her individual complaint into a group complaint, which in the employer’s view was not a proper expansion at that point in the process. It continues to be the employer’s position that the complaint before me only pertains to Ms. Kaine and her individual complaint.

6In support of the employer’s position that the matter before me is an individual complaint filed by Ms. Kaine, counsel notes that Ms. Kaine’s original complaint does not include any additional names or signatures of other applicants, and that the employer did not have a list of complainants that Ms. Kaine claimed to represent. As to the fact that the Ministry’s response to her complaint was addressed to Ms. Kaine and six other managers, counsel states that this was an exercise in efficiency by the employer as the response related to similar complaints. At the same time, counsel stresses that this was not an agreement by the employer to consolidate all the similar complaints forwarded to the Board. The employer submits that the matter should not be considered a group complaint at this stage, given the lack of evidence that the other managers had consented to this hearing or the form of this hearing, and that the preliminary objections it had made were specific to Ms. Kaine’s case. Therefore, the Employer has not had an opportunity to put forth any preliminary objections that may be applicable to any additional complainants.

7In any event, counsel submitted that the employer was satisfied to reserve its right to raise any additional preliminary motions should the Board take jurisdiction over Ms. Kaine’s individual compliant or in the event it decided that the matter was indeed a group complaint. Those additional motions were said to include issues as to improper notice, timeliness and mootness.

8When it became clear to the Board that there was a dispute as to whether there was a group complaint, and if so who was in the group, the Board contacted the other named managers, forwarding the employer’s submissions and advising that it did not have any record of complaints from two of the individuals named as members of the group. Ms. Kaine responded clarifying her view of her role, in light of the identically worded complaints. She stated that she never claimed to represent anyone other than herself, but was willing to be the “face” of the group who had submitted the same complaint, and had been treated as a group by the employer in the complaint stage.

9Most of the named members of the group responded, affirming that they had been kept informed of the process of the matter, consenting to Ms. Kaine’s acting as their representative and saying they wanted to be part of the common or group grievance. Another wrote indicating that he had faxed a Form 1 advancing his complaint to the Board around the time the others did, to which the Registrar responded, letting him know that the Board had not received it. He indicated he would attempt to obtain a fax confirmation, but to date, the Board has not heard further. The Board received no reply from the last of the named group.

10In reply, employer counsel reiterated its position as to the points outlined above, and added that the employer was not aware of any procedural mechanism within the Public Service of Ontario Act to file group complaints.

11In response to the above situation, in is appropriate to start by noting that it is true that there is no explicit reference to group complaints in the legislation or regulations governing the Board’s procedures. They are neither prescribed nor prohibited. However, there are many examples in the Board’s case law of complaints that were filed together by more than one complainant, or were filed separately with similar wording or issues and heard together, with various combinations of representation and spokespeople. On many occasions, especially when the matter is identified at the outset as a group grievance, and the complaint is signed by all members of the intended group, there has been no issue raised. This is particularly so where both sides see potential economies of time, effort and money by grouping the same or similar issues. The individuals with the right to complain to the Board are not represented by unions who provide representation for grievances, and it is very common for complainants to represent themselves and/or colleagues rather than retain counsel, with the accompanying expense. The Board’s Rule 6(a) provides that a complainant may present his or her complaint personally or may be represented by a representative, and Rule 20 provides that the Board may consolidate or hear cases at the same time or immediately one after the other when the complaints have a question of law or fact in common. The combination of these provisions and the practicalities of many group situations have meant that group complaints or groups of complainants are not uncommon at the Board. Nonetheless, issues have arisen from time to time as to the composition of a group, or who is the spokesperson or representative, which are dealt with on a case by case basis.

12In the circumstances of this case, the employer proceeded on the basis that the matter before me was an individual grievance, and formulated its objections on that basis. Further, not all the members of the group have been in communication with the Board, and those whose complaints were received by the Board were advised that their complaints would remain in abeyance until Ms. Kaine’s was dealt with. One option is to consider this decision as applying to those who wrote consenting to Ms. Kaine’s representation, albeit part way through the process. Although the Board is not aware of any prejudice to either side that would flow from such an option, it appears that the better option, as it is the most straightforward, is to continue in the vein in which all the matters were originally handled, i.e. render a decision on Ms. Kaine’s complaint first, and then deal with those held in abeyance. In the result, this decision is directed at Ms. Kaine’s individual complaint, and the others will be dealt with after issuance of this decision.

The Background Context of the Complaint

13This complaint, as with many others filed with the Board from complainants across the province, disputes certain aspects of managerial compensation for the fiscal year 2011/2012. This was a year in which restraint measures froze wages for non-bargaining unit employees at 2011 levels, and pay for performance was not paid out as managers had come to expect. The complaint now before me characterizes the change as unfair and incompatible with values of the Ontario Public Service which would ensure that the compensation process is fair, equitable and transparent. This complaint addresses the same compensation provisions as a recently issued decision, Smith et. al and the Crown in Right of Ontario (Ministry of Community Safety and Correctional Services, PSGB# P-2012-4155, dated July 9, 2014. The factual background, in the portion applicable to this case, was set out in that decision as follows:

As employees excluded from collective bargaining, [the complainants] are covered by the Management Compensation Plan (MCP), which is set by a combination of directives issued by Management Board of Cabinet and government-wide compensation policies consistent with them, rather than by collective negotiations as is the case for members of bargaining units. For several years prior to 2012, employees such as the complainants have been able to increase their compensation by only one route: a favourable pay for performance rating from their superiors. Those ratings were translated, according to annually set policy, into a range of percentage increases. A zero percentage rating was reserved for those with problematic performance ratings, and a person who “met all” the performance expectations, for example, received an increase in each of the years leading up to this complaint. That changed in 2011/2012 because of fiscal restraint, when the range of performance awards was set at 0%, basically freezing wages, regardless of whether performance was worrisome or wonderful. In the policy dated September 28, 2012 which describes this, one reads that performance pay for the 2011-12 year is set at zero percent for non-bargaining unit Ontario Public Service employees, and that “the earnings of non-bargaining unit employees, who were eligible for performance pay, are to remain at 2011 levels.”

The focus of this complaint is what appeared to some as an exception to the general wage freeze. Despite the general lack of increases, some members of the Management Compensation Plan received lump sum payments in the end of 2012, while others did not, and it is this difference that the complainants are seeking to remedy. The employer sees the lump sum payments as a way to ensure that the managers who received them did not experience a decline in their basic annual earnings, while the complainants see them as an arbitrary favouring of the group of employees already at the maximum in 2011, by giving them a payment which was unavailable to others. The payments were provided on December 20, 2012 and were equal to the amount of lump sum performance awards paid in 2011.

In order to understand this preliminary dispute, and before discussing the relevant legal framework below, it is necessary to go back to how the pay for performance plan was structured just prior to the restraint measures of fiscal year 2011/2012. Jobs covered by the Management Compensation Plan are compensated according to a wage grid, with a minimum and a maximum of yearly wages, through which employees could move by means of their performance-related awards, rather than by length of service, or across-the-board increases. Once any such movement brought the employee to the maximum of the pay grid, any remaining entitlement to a pay for performance award for those in the “outstanding” and “fully effective” categories was paid out in a lump sum payment, rather than a corresponding additional increase in base salary. For example, if members of the Management Compensation Plan close to the maximum of the pay grid, received a performance award of 3%, whatever portion of that increase was necessary to bring them to the maximum would be “used up” in a salary increase, and the remainder would be paid out in a lump sum. So, if it took 1% of the 3% award to get to the maximum of the pay grid, that employee’s annual wages would be increased by 1%, and then he or she would receive a 2% lump sum award that was not rolled into the annual salary rate. For purposes of this award, the sum of the salary determined by the grid maximum and the amount of the lump sum, if any, will be referred to as an employee’s “basic annual earnings”. That basic scheme remains in place in the policies relating to pay for performance, but with the percentage set at zero for the fiscal year 2011/2012, no one moved on the grid for that fiscal year.

The employer’s view of the lump sum payments paid for the fiscal year 2011/12 is that, rather than representing an increase in compensation denied to others, it was a payment to prevent a decrease as compared to the year before for those who were eligible to receive it. This is explained in the relevant policy referred to above:

For employees who were at the maximum of their salary range on April 1, 2011, the application of the 0% performance pay may result in a reduction of their earnings in 2012 from the 2011 level.

A reduction in earnings occurs when an employee’s earnings (comprised of annualized base salary and variable re-earnable incentive payment) for the fiscal year starting April 1, 2012 are less than their annualized salary for the fiscal year starting April 1, 2011.

In these instances, the employees may be eligible to receive a payment to maintain their earnings at their previous year’s level.

The amount of the payment is an amount up to the variable re-earnable incentive payment in respect of the 2010-2011 performance cycle.

The payment does not alter the employee‘s annual base salary or salary-based benefits and is not included in pensionable earnings calculations.

Employees who received a base salary adjustment, but not a variable re-earnable incentive payment in respect of the 2010-11 performance cycle are not eligible for a payment.

A Variable Re-earnable Incentive Payment is defined in the same policy as follows:

Performance related payment, paid as a lump sum, to employees at the maximum of their salary range. The payment of a variable re-earnable incentive does not alter the employee’s annual base salary or salary based benefits and is not included in pensionable earnings calculations.

The policy also provides an exception to the receipt of the payment in cases where an employee is not performing at an acceptable level or the employee is/has been subject to disciplinary measures in the previous fiscal year.

14The complainant’s view is that the changes described above represent a violation of her terms and conditions of employment, which she details as follows in her complaint dated July 5, 2013:

#1 I grieve that the employer has violated the terms and conditions of my employment under the Public Service Act of Ontario by unfairly applying a method of compensation administration that differs from other employees in the Ontario Public Service (OPS).

#2 And further, that the employer has failed to adhere to the Statement of Ethical Principles whereby OPS values are actively recognized and supported to ensure that the compensation process is fair, equitable and transparent.

#3 This complaint concerns the employer’s failure to honour the employment contract for the entire MCP category by changing the method of compensation for the fiscal year 2011-2012 without notice and after the end of the period.

#4 And further, that there has been no communication from the employer about Pay for Performance, which has been part of the MCP category compensation package (terms of employment) since 2008, for the fiscal year 2012-2013 (now past) and the current fiscal year, 2013-2014.

15As remedy for the above complaint, the complainant writes:

That MCP compensation is adjusted to reflect a merit increase for 2011-2012 similar to other public service sectors, specifically AMAPCEO.

That a decision be communicated regarding management compensation for the fiscal year 2012-2013, as there has been no indication of whether or not there will be Pay for Performance for the year immediately past. In addition, that all managers be advised of the compensation model that will be used for fiscal year 2013-2014.

That MCP salary levels be increased across the board since this category has not had an increase since 2008. This is tantamount to a wage freeze for the past five years.

That all managers be able to move through the salary grid, whether this is through Pay for Performance or through annual merit increases.

That and all retroactive payments for Pay for Performance be paid out immediately to all affected managers.

Submissions of the Parties

16Employer counsel begins his objection by referring to the undisputed fact that the authority to set or amend Public Servant (including management) compensation in the OPS rests with the Management Board of Cabinet in accordance with section 33(2) of the Public Service of Ontario Act, 2006 (PSOA). The various directives and policies supporting the disputed compensation package are in evidence, including the Management Compensation Plan Pay for Performance Operating Policy and the Management Compensation Plan Pay for Performance Operating Procedures. Undisputed provisions of these policies provide that the decision on the MCP Pay for Performance Grid for the performance cycle year will be made following the end of the performance cycle year, and that performance awards may or may not be approved for any performance year.

17It is the employer’s position that the regulation set out below provides that the compensation denied or provided to an employee for performance is outside of the Board’s jurisdiction, and that the complaint should be dismissed on that basis. Further, the alleged breaches set out above relate to the employer’s method of compensation administration and since there is no other compensation structure for non-bargaining unit employees to move through their salary range other than Pay for Performance, then this complaint cannot be about anything other than Pay for Performance, in the employer’s view.

18The complainant responds to the objection by referring to the introduction to the Management Compensation Plan (MCP) Pay for Performance Operating Policy which states: "The Pay for Performance Operating Policy supports the objective of being a performance focused organization with salary movement based on performance. MCP employees progress through their salary ranges solely based on performance through their pay for performance award". In the complainant’s view, this 2008 policy continues to constitute a term or condition of her employment, including its statement that excellence in employee performance is rewarded. Further, it states that OPS values are actively recognized and supported to ensure the process is fair, equitable and transparent and employee awards are linked to on-the-job performance results. The complainant states that despite the fact that managers have continued to receive performance ratings on an annual basis, the employer has failed to honour the MCP Pay for Performance Operating Policy by failing to allow an opportunity for those managers not at the top of their pay grid to move through the grid as other employees within the Ontario Public Service, such as those represented by OPSEU [Ontario Public Services Employees Union] and AMAPCEO [Association of Management, Administrative and Professional Crown Employees of Ontario] have done during the same time period. Further, managers at the top of their pay grid have been awarded arbitrary "lump sum" awards that apparently have no relation to their performance over the previous year.

19The complainant asserts that managers have never been advised of a decision to discontinue Pay for Performance as outlined in 2008 and that, as such, it remains part of the managers' compensation package. To illustrate this point, the complainant cites information given to a manager who left the OPSEU bargaining unit to become a permanent manager after 2008, who signed a form that states the following:

For Management employees, Pay for Performance has replaced merits. Every 12 month period commencing April 1of each year, employees may receive their pay for performance. Employees who have reached the maximum of their salary range will be eligible for a lump sum bonus based on performance.

20Acknowledging that the performance rating for an individual manager cannot be the subject of a complaint or grievance, the complainant takes the position that the employer has breached its contractual obligations by failing to honour the agreement that is currently in place to allow managers to move through their salary grid based on performance ratings. Despite ratings of "Outstanding" or "Fully Effective" within a performance cycle, these managers have been frozen at their current salary level over the past two fiscal years and possibly the most recent fiscal year, which ended March 31, 2014. The complainant characterizes this as unacceptable and discriminatory.

21In support of this position, the complainant refers to an Ontario Ministry of Labour decision, Non-union Staff of the City of Toronto and the City of Toronto ; Claim #s 70063991-1, etc., a decision of Employment Standards Officer Rick Richards, dated March 21, 2011, concerning pay for performance for the City of Toronto non-bargaining unit employees. In that decision, it was found that there is an expectation that employees receive notice of a substantial change in terms and conditions of their employment, especially one concerning merit pay and compensation. The complainant quotes a spokesperson for the employees who had brought the complaint resolved by that decision, to the effect that the affected employees worked for a full year on the understanding that this pay was part of their compensation, and that the award simply confirms that “if you promise to pay people for their work, then you've got to keep the promise.”

22The complainant states that no such notice has been received to date announcing awards solely for those at the top of their salary grid, nor has there been any attempt by the employer to replace the current compensation plan, which includes Pay for Performance, with something more equitable and transparent. She states that the group of managers from her Ministry who submitted a grievance in April 2013 are very disheartened by the treatment received at the hands of the employer, firmly believing that this needs to be remedied by the Public Service Grievance Board.

23In reply to the Applicant’s submissions, employer counsel emphasizes that that the Pay for Performance Directive did not change in 2012. Essential to the employer’s position is the fact that the pay for performance policy and procedures, which are still in place, both contemplate that the award for performance may be set at 0% in any given performance year. The pay for performance awards for all performance categories in 2011-2012 performance cycle were set at 0%.

24In addition to the employer’s position that the Board does not have the jurisdiction to hear complaints about the compensation provided or denied as a result of an employee’s performance rating, the employer stresses that the pay provisions laid out in both the OPSEU and AMAPCEO Collective Agreements do not apply to Ms. Kaine as she is not represented by either bargaining agent. Further, the enforcement of terms and conditions of collective agreements not applicable to managers is also beyond the jurisdiction of the Board.

25In response to Ms. Kaine’s submission to the effect that pay for performance for 2011-2012 was “discontinued” and was not communicated to staff, counsel submits that pay for performance was not discontinued for 2011-2012. Rather, the performance award for all performance ratings was set at 0% in line with the authority provided in the relevant directive.

26In respect of the complainant’s reliance on the City of Toronto decision, cited above, counsel notes that Section 3(4) of the Employment Standards Act, 2000 sets out the provisions in the Act that apply to the Crown. Part V of that Act, which contains the wages provisions on which the City of Toronto case was decided, does not apply to the Crown. As such, counsel submits that the decision provides no guidance on the issues before the Board.

27In support of his argument employer counsel relies on the following case law:

Gary Sumner et al and the Crown in Right of Ontario (Ministry of Health and Long-term Care), PSGB# P-2006-1143 etc., (O’Neil); Robert Younger and the Crown in Right of Ontario (Ministry of the Environment), PSGB# P-2006-2458, (O’Neil); Anthony Hill et al and the Crown in Right of Ontario (Ministry of Community Safety and Correctional Services), PSGB# P-2004-3699, (O’Neil); Garratt et al and the Crown in Right of Ontario (Ministry of Health and Long-term Care) P-2003-1670, (O’Neil); Tyrrell et al and the Crown in Right of Ontario (Ministry of Community Safety and Correctional Services, PSGB# P-2003-2687 etc., (Carter); Berenbaum and the Crown in Right of Ontario (Ministry Labour), PSGB# P-2007-0407(O’Neil) and Lori St. Amant and the Crown in Right of Ontario (Ministry of Community Safety and Correctional Services), PSGB# P-2012-0601, (Carter).

Excerpt from regulation 378/07

28The following excerpt from regulation 378/07 under The Public Service of Ontario Act, 2006 is most pertinent to this preliminary issue:

Complaint about a working condition or a term of employment

4. (1) Subject to subsection (2), a public servant who is aggrieved about a working condition or about a term of his or her employment may file a complaint about the working condition or the term of employment with the Public Service Grievance Board,

(a) if the public servant is eligible under sections 5 and 7 to file such a complaint;

(b) if the public servant gives notice in accordance with section 8 of his or her proposal to file the complaint; and

(c) if the public servant complies with the filing requirements set out in section 10. O. Reg. 378/07, s. 4 (1).

(2) The following matters cannot be the subject of a complaint about a working condition or about a term of employment:

1. The term or duration of the public servant’s appointment to employment by the Crown.

2. The assignment of the public servant to a particular class of position.

3. A dismissal without cause under subsection 38 (1) of the Act or a matter relating to such a dismissal.

4. The evaluation of a public servant’s performance or the method of evaluating his or her performance.

5. The compensation provided or denied to a public servant as a result of the evaluation of his or her performance. O. Reg. 378/07, s. 4 (2).

[the bolded paragraph is the focus of the employer’s objection]

Considerations and Conclusions

29As noted in the recent Smith decision cited above, there have been various aspects of the employer’s move to merit-based compensation over the last several years which have generated complaints resolved by decisions cited above. These include: retroactive recharacterization of lump sums as progress on the grid (Sumner and Pedder), failure to take into account a retroactive reclassification in the implementation of the pay for performance policy (Berenbaum), cap on the number of employees who could receive an “exceeds” rating, failures to follow the policy in regards to evaluation of performance, failure to recognize employees who participated in a labor disruption by not awarding “exceeds all” ratings, the creation of pay inequities between pay classes (Tyrell), and failure to conduct a performance evaluation in the manner expected, or with the anticipated results (Younger), for instance. The Board has consistently found under the regulations in place since 1990, that it did not have jurisdiction over complaints about the process of evaluation or its fruits in terms of either the level of the performance evaluation or the compensation granted or denied in relation to performance.

30Looking at the subject matter of the complaint now before me, it is very clear that the central event complained of is denial of pay for performance. The provisions that the complainant claims were not honoured are all about pay for performance. Having carefully reviewed the complaint and the written submissions, I am persuaded that the substance of the complaint is that she did not receive pay that was based on performance in the fiscal year 2011-12. Such aspects of the complaint are clearly not within the Board’s jurisdiction as they pertain to compensation denied in respect of the complainant’s performance, a subject matter specifically excluded by the regulation set out above.

31As well, the claims for remedy are nearly all requests that the Board set different terms and conditions of employment than are part of the complainant’s current employment contract. The Board has no authority to set terms and conditions of employment; it can only order the enforcement of already existing ones. Therefore, the claims that MCP compensation be adjusted to reflect a merit increase similar to AMAPCEO, that salary levels be increased across the Board and that all managers be able to move through the salary grid, are all remedies that the Board is without the authority to award, as they would require it to establish new terms of the managers’ employment contract. As well, similar to the situation in the Hill decision, cited above, there is no term or condition of employment in evidence establishing any required link between the complainant’s compensation and that of those of any member of a bargaining unit.

32The remedial requests that Management communicate the terms and conditions of compensation for 2012-13 and 2013- 2014 are not by themselves outside the jurisdiction of the Board. However, they flow from a complaint whose subject matter is the denial of pay for performance, and as such, are inextricably linked to a complaint over which the Board lacks jurisdiction. Moreover, there are no provisions of the managers’ contract in the material before me which establish that the employer must communicate at a certain time, or in a certain way. To the extent that the complaint is that the employer did not communicate the zero-percentage pay-for-performance rating until after the performance cycle, the policies in evidence contain explicit provisions that any performance awards will be announced after the performance cycle in question. Therefore, even if the Board had jurisdiction over the subject matter of the complaint, i.e. the denial of pay for performance, there is no viable case on the basis that the employer did not announce the level of performance awards in advance.

33The issue about notice is linked to the allegations concerning the OPS values of transparency. As the Board wrote in response to a similar theme in the Smith complaint:

Although it may be that specific communication earlier on might have given the complainants better understanding of the lump sum payments, and allayed concerns expressed in this complaint, there is nothing in the material before me that establishes a viable complaint of a violation of a specific term or condition of employment as to transparency, or specific amount of notice. As to the fact that the employer set the performance percentage at 0% after the performance year, the facts do not establish a viable case of a breach of the policy in this respect. The complainants had notice, in the longer standing pay for performance policy of the employer’s practice of setting the level of the performance award, if any, after the performance cycle, even if their attention was not specifically drawn to it before the compensation freeze at issue in this decision. More generally, as in the Garratt decision, cited above, the allegations concerning transparency and fair and equitable treatment concerning wages are inseparable from the elements of the complaint which essentially ask the Board to set different terms and conditions of employment. I am not persuaded that they make out a viable allegation that is within the Board’s remedial authority.

34I have also separately considered the allegation based on policy provisions, such as in the Statement of Ethical Principles, to the effect that OPS values are supported to ensure that the compensation process is fair, equitable and transparent. Although such policy statements are not outside the Board’s jurisdiction, in this case they, too, are inextricably linked to the central complaint before me, which is that the employer denied pay for performance, and are also asking for the setting of different terms and conditions of employment as to the compensation process, which is not within the Board’s power to do. The link between the central subject of denial of pay for performance and the claims for fairness and transparency is made very clear in the following passage from the complainant’s submissions:

We assert that the employer has never, either verbally or in writing, communicated a decision that there would be a change in management compensation subsequent to the announcement in 2008 that a Pay for Performance compensation model would be implemented. This failure on the part of the employer to honour the terms of the employment contract for managers in the MCP category over the past two years and during the current fiscal year has been unfair and inequitable and has lacked transparency.

35As noted above, the complainant relies on the City of Toronto decision, cited above, stating that the managers have continued to fulfill the expectations set out by the employer on an annual basis and have been, in effect, denied wages already earned as part of their contract and that this violates conditions of employment as set by the employer. The complainant also states that there is an expectation that employees receive notice of a substantial change in terms and conditions of their employment, especially one concerning merit pay and compensation. The complainant states that no such notice has been received to date announcing the continuing entitlement to bonuses solely for current and former staff already at the max of their salary grid. The reference to “earned wages” is a reference to the requirement in Part V of The Employment Standards Act that the employer pay earned wages, which was the basis of the City of Toronto decision. The reference to bonuses solely for those at the maximum of the grid was also the focus of the Smith complaint. These themes were addressed in the Smith decision, cited above, as follows:

I have also carefully considered the viability of the claim that the complainants had a legitimate expectation that they would be paid pay for performance or that they would receive reasonable notice if they were not going to receive it. Reference was made in this respect to the City of Toronto decision, cited above. Quite apart from the undisputed fact that Part V of The Employment Standards Act, relied on as the basis of that decision, does not bind the Crown, I find the facts of that case sufficiently different that the decision lends little support to the complainants’ case. The findings of fact included that the employer, by way of a vote at City Council, had authorized the payments in question, and then tried to withdraw them after the employees’ right to them had vested. In this case, there is no evidence that the payments sought had been authorized for those who were not at the maximum of the grid in 2011. As well, although there is little doubt that the pay for performance policy is a term and condition of employment of the complainants, just as it was for the non-union City employees, there is nothing in the City of Toronto decision that indicates that part of the City’s policy was an express provision that the levels of pay for performance could be set at 0% in any year. No doubt, the fact that performance awards had been made in all recent years distracted from employees’ concentration on the part of the policy that allowed the employer to refrain from approving performance awards for any given performance cycle. Most basically though, there is no exemption in The Employment Standards Act from the consideration of complaints related to pay for performance as there is in this Board’s governing regulation.

36In other words, it is true that Pay for Performance is a term and condition of managers’ employment, but is one which the regulation removes from the complaints which the Board has the power to consider or remedy. In any event, the Pay for Performance policies include explicit provisions that awards may not be granted in any given year, and that the amount of any award will be set after the performance cycle. Therefore, although the pay for performance policy is no doubt intended to help motivate managers to perform well, in the form currently in evidence, it does not guarantee any payment in any given performance cycle, and explicitly provides that the level of any payment will be set retroactively.

37Ms. Kaine made references in her material to the payments authorized for those already at the maximum of the grid as arbitrary and discriminatory. Similar claims about arbitrariness were dealt with in the Smith decision as follows at paras. 39 :

The undisputed fact is that failure to pay any such lump sum payments flows from the decision to set the performance pay awards at 0% for 2011/2012, and to freeze the basic annual earnings of MCP employees at the level they had reached in 2011. Further, and despite the complainants’ characterization of the lump sum payments as arbitrary, it is also undisputed that the lump sum payments maintained the annual earnings of those who were at the maximum of the pay grid in 2011 at the level they had achieved as a result of the application of pay for performance levels for the fiscal year 2010/2011. Thus, the uncontested facts establish that the compensation policy for 2011/2012 treats both sets of employees the same in terms of leaving them all at the level of basic annual earnings they had achieved in 2011. For those who were at the maximum of the pay grid in 2011, the 2012 payment served to maintain their level of basic annual earnings, rather than limiting them to the maximum of the pay grid, with no additional remuneration, which the policy defines as a decrease in annual earnings.

38As well, the Board found in Smith, in remarks that are equally applicable here, that there was nothing in the material about the lump sums paid in 2012 that established any viable claim of discrimination on any prohibited ground. Further, the policy provisions in evidence do not require that all employees be treated the same. The undisputed pay provisions create differences based on many factors such as classification and service. As in Smith, the complainant does not argue that all jobs should be paid the same, regardless of qualifications, responsibilities, etc., although that might accord with some people’s idea of equality. Moreover, the remedy requested for the complainant’s claim that the 2012 lump sum payment to those at the maximum of the grid in 2011 is discriminatory would, once again, require the Board to create a new condition of employment, rather than enforce a pre-existing one. The Board does not have the authority to do so.

39For all of the above reasons, the Board finds that the complaint must be dismissed as beyond its jurisdiction as it relates to the denial of pay for performance and in respect of its claims for the setting of new terms and conditions of employment.