PSGB#P-2014-1876

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

Sanders et al

Complainant

• and -

The Crown in Right of Ontario (Ministry of Attorney General)

Employer

BEFORE

Kathleen G. O’Neil

Vice-Chair

FOR THE COMPLAINANT

Heather Sanders

FOR THE EMPLOYER

Peter Dailleboust Treasury Board Secretariat Legal Services Branch Counsel

WRITTEN SUBMISSIONS

Completed August 29, 2014.

Decision

1This decision deals with the complaint of Heather Sanders and a group of thirty-three other Managers in the Victim/Witness Assistance Program (V/WAP) in which they assert that compensation for managers in the Ontario Public Service was applied unequally and unfairly. This is based mainly on the fact that, for the fiscal years 2011-2012 and 2012/2013, managers at the top of their pay grade received compensation in the form of a lump sum which managers not yet at the top of their pay grade did not receive. The complainants submit that this inconsistent treatment contravenes government policy aimed at ensuring that the pay for performance policy is applied fairly and consistently.

The Background Context

2The complainants are among many who have filed complaints with this Board contesting certain aspects of their compensation, and/or that of others of their colleagues, for the fiscal year 2011/2012 and ongoing, flowing from decisions by the employer related to pay for performance. In that year, pay for performance was set at 0%. In explaining the background of this widespread issue, the Board wrote the following concerning similarly situated complainants in its recent decision Smith et. al and the Crown in Right of Ontario (Ministry of Community Safety and Correctional Services,, PSGB # P-2012-4155, 2014 CanLII 48098 (ON PSGB), dated July 9, 2014 :

As employees excluded from collective bargaining, they 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 covered by the MCP who met or exceeded performance expectations 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.”

3As with the Smith complaint, the focus of this complaint is what appeared to some as an exception to the general wage freeze. This was explained in the Smith decision as follows:

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.

4The Smith et.al. complaint was dismissed in part as beyond the Board’s jurisdiction, and in part because it did not disclose a factual basis for a viable complaint, known as a prima facie case, as it would have required the Board to set new terms and conditions of employment in order to grant the complaints. Given the similarity of this group complaint to that dealt with in the Smith et.al. decision, the Board wrote to the complainants, pursuant to the Board’s Rule 9, indicating its intention to dismiss the complaint as one related to pay for performance, providing them with a copy of the Smith decision, and giving the complainants an opportunity to make submissions before it did so. Rule 9 reads as follows:

Where the Board considers that a complaint does not make out a case for the orders or remedies requested, even if all the facts stated in the complaint are assumed to be true, the Board may

dismiss the complaint without a hearing or consultation. In its decision the Board will set out its reasons.

Considerations and Conclusions

5The complainants took the opportunity to make submissions, in which they argued that their complaint was not related to “compensation provided or denied to a public servant as a result of the evaluation of his or her performance.” These are the words used by s. 4 (2) of Regulation. 378/07 under the Public Service of Ontario Act to exclude complaints related to pay for performance from the Board’s jurisdiction, part of the foundation of the dismissal of the Smith complaints. The complaints state that their complaint is, instead, “about unfair pay for equal work and unfair pay practices, which have nothing to do with the evaluation of managers’ performance.” The complainants’ submissions go on to complain of the payment of lump sums paid to some managers but not others, on the basis that they had nothing to do with performance, and were based on a policy which they had not seen. The complainants ask that the Board request and review that policy before concluding that their complaint does not fall within its mandate.

6Further, the complainants submit that the employer has given mixed messages about whether the lump sums paid in 2012 and later relate to pay for performance or not, as the payments were in the same amounts as the lump sums paid to those managers in 2011 as part of their pay for performance. The complainants submit that they were told that the payments were made for political reasons to make sure the amount of compensation on the T-4 slips of the managers who had received the lump sums matched that of the year before, and that such reasons fly in the face of the principles of transparency and accountability applicable to the Ontario Public Service. The complainants see the employer’s position that the Board does not have jurisdiction over the complaint as an acknowledgment that the lump sums were in fact pay for

performance, and a position inconsistent with the one taken by employer representatives at the Stage Two dispute resolution meeting.

7The complainants also state that some managers who received the lump sum were asked not to say anything about it, and that there was no communication provided to managers as to the purpose of the lump sum payments. The complainants ask: why the secrecy? Where is the transparency?

8On the basis of unequal pay for equal work and unfair pay practices, the complainants urge the Board to take jurisdiction and hear their complaint.

9Employer counsel responded to these submissions, in most relevant part, as follows:

The complainants have now confirmed that this complaint is not to seek pay for performance for 2011/12 or 2012/13. On that basis the Board can ignore the parts of the Smith et.al. decision which refer to that line of argument. We wish to clarify one point however. The complainants have asserted that the Employer has changed their position by calling the lump sum payment pay for performance. The complainants, with respect, are mistaken. The Employer is not and never has characterized the lump sum payment made to some employees and not others as pay for performance. What the Employer has always said is that all employee’s pay for performance was set at 0% for the years at issue.

With respect to the remainder of the complaint, the Board in Smith et.al dealt precisely with the policy that provided for the lump sum payments made in 2011/12 to those employees that were at the top of their range in 2010/2011. As the Board is aware, the policy was produced for the hearing in Smith et.al and then commencing at paragraph 6, the board sets out the relevant parts of the policy word for word.

It appears that the complaint here is the very same as those that were advanced in Smith et.al and Kaine et. al.: that the lump sum payments are arbitrary and unfair. It is the employer’s view that those arguments were dealt with thoroughly by the Board in both Smith et.al and Kaine et. al.and we therefore respectfully request that this complaint be dismissed without a hearing as the Board has already determined it lacks the remedial jurisdiction to render a decision on the merits.

10The Board has carefully reviewed this complaint, in light of the submissions referred to above, and the applicable policy, which is set out in relevant part in the Smith et.al decision. The complainants’ view that the lump sum payments were unfair, and not introduced or supported in a transparent way, is common among the complainants in the Smith group and many other complainants who filed complaints with the Board on the same or similar grounds. Given the similarity in the complaints, and the applicability of the same principles, the Board finds that the result must be the same as in the Smith et.al decision. The Board is of the view, for the reasons sent out more extensively in the Smith et.al decision, that this complaint is, in substance, all about the denial of pay for performance in the fiscal years from 2011/12 and onwards, and therefore beyond the Board’s jurisdiction. As the Board wrote in Smith et.al,

The nub of the complaint is the failure of the employer to pay those not at the maximum of the pay grid in 2011 a lump sum payment in 2012. The basic fact that those not at the maximum of the pay grid in 2011 stayed there, and had no way to increase their basic annual earnings is because they were denied pay commensurate with their performance in that fiscal year. …

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.

11In this complaint, the request for relief is very explicit in requesting compensation based on the complainants’ 2011-2012 and 2012-2013 performance ratings, and ongoing into 2014 and beyond. Complaints about “compensation provided or denied to a public servant as a result of his or her performance” are specifically removed from the Board’s jurisdiction by s. 4(2) of Regulation 378/07 which provides that such complaints cannot be the subject of a complaint to this Board. The Board is a creature of statute, with only the powers permitted by statute. Thus, the Board lacks the power to remedy failure to pay the requested performance-based compensation.

12As noted, the complainants also argue that the lump sum payments amount to unequal pay for equal work and unfair pay practices. These arguments were also made by the complainants and dealt with by the Board in the Smith et.al decision. As to the equal pay argument, the Board wrote as follows:

There is also the claim for equal pay for equal work, including the statement that the arbitrary bonus payments violate the spirit of the Pay Equity Act. This aspect of the complaint has the ring of an allegation of an illegal compensation provision. And if there were anything in the alleged facts that established a viable basis for such a claim, the Board would have the jurisdiction to let the claim proceed. However, there is nothing in the material before me that constitutes a viable case of a violation of any policy or legislative provision as to equal pay for equal work. It can be seen from the provincial legislation providing for equal pay for equal work, and equal pay for work of equal value, that the kind of unequal pay that is illegal is that based on gender or sex discrimination. See, in particular, s. 42 (1) of The Employment Standards Act and section 8 of the Pay Equity Act where it is made clear that differences in compensation which are the result of compensation policies which do not discriminate on the basis of sex or gender do not constitute failures to pay equal pay in the sense prescribed by Ontario law. More generally, there is no suggestion of any gender-based disparity here, or of discrimination in wages on the basis of any other ground prohibited under the Ontario Human Rights Code. The only discrimination alleged is between those at the maximum of the pay grid in 2011, and those who were not. There is nothing in the material before me that persuades me that this is a viable claim of a breach of the complainants’ terms and conditions of employment, as there is no statute, policy or other term and

condition of employment in evidence which arguably prohibits that kind of difference.

The above remarks are equally applicable to this complaint.

13As to the issues about transparency and general fairness of the disputed compensation terms, the Board wrote in response to similar themes in the

Smith et.al. 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.

*Garratt et al and the Crown in Right of Ontario (Ministry of Health and Long-term Care) P-2003-1670, (O’Neil), 2005 CanLII 53194 (ON PSGB)

To similar effect is the Board’s July 11, 2014 decision in Kaine v Ontario (Children and Youth Services), 2014 CanLII 48097 (ON PSGB), PSGB # P-2013-1036.

14For 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, and as failing to make out a viable case of a breach of any existing term or condition of employment.