PSGB#P-2016-1279

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE OF ONTARIO ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

Rotondo

Complainant

• and -

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

Employer

BEFORE

Kathleen G. O’Neil

Chair

FOR THE COMPLAINANT

Robert Rotondo

FOR THE EMPLOYER

Peter Dailleboust Treasury Board Secretariat Legal Services Branch Counsel

HEARING SUBMISSIONS

February 21, 2017 May 5, 2017

Decision

1This decision deals with the complaint of Robert Rotondo relating to his claim to pay improvements in respect of the fiscal year 2015/2016. The employer takes the position that, despite an error which resulted in an initial overpayment, he has now been paid according to the applicable pay policies, so that nothing further is owing.

2There was no objection to the Board’s jurisdiction to hear and determine this dispute.

3The facts necessary to this decision are mostly not in dispute. It is primarily the legal conclusions that flow from the facts that are the subject of debate, as will be discussed below.

4Mr. Rotondo has been a manager of Enforcement Services with the Family Responsibility Office since 2001, with the exception of two secondments. Most relevant to this complaint is a secondment Mr. Rotondo took up in 2014, in a position in the Association of Management, Administrative and Professional Crown Employees of Ontario (AMAPCEO) bargaining unit. He returned to his home position from this secondment on May 11, 2015.

5When Mr. Rotondo took up the AMAPCEO position, which had a higher maximum to its salary grid than his home position, he received a 3% promotional increase, and was eligible for any increases negotiated by AMAPCEO while he was in that position. When he returned to his home managerial position, his salary was adjusted in accordance with the Pay on Assignment Operating Policy. The dispute with which this decision deals arises from retroactive pay improvements for managers, announced late in 2015. Mr. Rotondo submits that these improvements were not applied to him in a fair way. He observes that managers were encouraged to take on new assignments, but that he has ended up worse off in respect of his pay than if he had stayed in his home assignment or been on sick leave.

6The payments in question are referred to in policy documents issued late in 2015. The context for these payments, in general, was fiscal restraint which resulted in a freeze on managerial salaries from 2012 through 2015. For several years prior to 2012, managerial increases had been tied to individual performance, with higher percentage increases if performance exceeded expectations. The variable percentage amounts were applied to move the individual employee on the relevant salary grid up to the maximum. Employees who had reached the maximum of their pay range received any excess over the maximum as a lump sum. Mr. Rotondo was among those employees, who received annual remuneration which consisted of regular salary payments and a lump sum.

7When the managerial salary freeze was implemented, pay for performance was set at zero, preventing movement on the managerial salary grid. For the most part, managers who had received lump sums as part of their performance awards in 2011, because they were at the maximum of their pay grids, received payments in 2012, 2013 and 2014 that were designed to maintain their earnings, by preventing a decrease in annual compensation due to the lack of the lump sum portion of their compensation.

8The new 2015 pay provisions for managers were announced by a memo from Secretary of Cabinet Steve Orsini, dated December 15, 2015. The detailed terms of the changes were not contained in the memo, but were found in pay directives and policy documents which will be discussed below. They provided, subject to certain conditions, for the continuance of the lump sum payments to managers who had received them in 2011, referred to above, as well as a salary adjustment effective April 1, 2015. If the salary adjustment took an individual manager over the salary range maximum, the employee was paid at the increased rate, now called the employee’s “designated salary”. This resulted in managers being paid at different rates above the maximum, an effect which Mr. Rotondo finds inconsistent with the definition of a salary range maximum. Key to the unfairness complained of by Mr. Rotondo is that colleagues with shorter tenure in the same position than he were being paid a higher salary rate.

9Mr. Rotondo received a lump sum payment on December 31, 2015, which he understood was related to the new pay provisions. Subsequently, the employer informed him that he was not entitled to it because he had been in an AMAPCEO bargaining unit position on April 1, 2015. When he was unable to obtain a satisfactory explanation for the removal of this lump sum, this complaint followed.

10Evidence at the hearing demonstrated that Mr. Rotondo also received a second lump sum in a different amount on March 10, 2016. The employer’s position at the hearing was that this second payment was the one paid in error, as it represented a percentage increase applied to the complainant’s AMAPCEO salary, rather than his home managerial position, while the one received in December was in fact correct. The second payment is being recovered by the employer in installments.

11The parties’ position on the detailed policy provisions will be discussed further below.

Considerations and Conclusions

12The issue to be determined in respect of the above-noted facts is whether the complainant is eligible for additional compensation under the terms of compensation policies announced in late 2015.

13Several policy provisions are directly relevant to the determination of this matter. In terms of the complainant’s entitlement on return from a bargaining unit secondment, the following provision in the 2011 Pay on Assignment Operating Procedure applies:

• On reassignment to his or her home position, an employee must receive the rate of pay he or she would have attained if the acting assignment had not taken place.

• The return to home salary is determined by adding any merit pay increases or performance pay increases that the employee would have received if he or she had remained in the home position, to the salary that the employee last earned in the position up to, but not exceeding the salary range maximum. [Emphasis added.]

14Employer counsel notes that this is the language that applied when the complainant returned to his home position in May 2015. His salary remained the maximum of the salary range maximum, as it had been when he left the position in 2014. The policy speaks to any merit increases or performance pay the employee would have received if he had remained in the home position, but there were no performance or merit payments paid to managers in the period of the complainant’s AMAPCEO secondment. Therefore, there was nothing to be added in that respect. In any event, if there had been any performance or merit payments, they would have applied only up to the salary range maximum, which is where Mr. Rotondo was placed on his return to his home position. Therefore, it appears he was treated in accordance with the Pay on Assignment Policy when he returned to his home position.

15There is another aspect of the Pay on Assignment Policy which is relevant to the remainder of this complaint. Throughout the pay on assignment policy, it is clear that the rates of pay applicable at any given time are the rates for the work being done at the time, in the class of position to which an employee is assigned. The position to which one is assigned is clearly the one in which one is working. On April 1, 2015, the date of the first of the new pay provisions here in issue, Mr. Rotondo was assigned to an AMAPCEO position, not his home managerial position.

16Mr. Rotondo first became aware of the pay provisions in issue when he read the memo from Secretary of the Cabinet Steve Orsini, referred to above. That memo outlined the employer’s efforts to ensure that non-bargaining unit employees did not fall further behind their bargaining unit counterparts, who had had the benefit of negotiated wage movement when non-bargaining unit employees had not. The memo provided the following specifics:

• Ensure earnings do not fall below 2011-2012 levels;

• Provide a one time in-range movement for employees who are within the salary range for their position effective April 1, 2015;

• Provide an increase to salaries of 1.4% for those who are within the salary range for the position, effective January 1, 2016;

• Provide paramedical coverage of $750 per employee, as well as for each employee’s eligible dependents, effect January 1, 2016.

17Mr. Rotondo was not eligible for the above provisions for those “within the salary range”, which refers to employees who had not yet received the maximum of their salary range, as he had been at the maximum of his home position salary range since 2009. The last provision about paramedical coverage is not in issue here.

18The remaining issue relating to Mr. Orsini’s memo is whether Mr. Rotondo was eligible for any compensation in respect of the first item referred to above, i.e. no reduction in earnings from the 2011-2012 levels. The employer’s argument is that this refers to the payments described above authorized between 2012 and 2015 for managers who were at the maximum of their salary range at the time managerial wage restraints were implemented in 2012 in order to prevent a decrease in their annual compensation. It is the employer’s position that Mr. Rotondo’s receipt of lump sum payments of this type was interrupted by the timing of his secondment to the AMAPCEO position, and that the remaining entitlements under two pay directives have been paid to him. Two pay directives, #33-54 and 33-55, provide the detail behind the announcements in Mr. Orsini’s memo referred to above.

19The first of these two directives, # 33-54, dated November 17, 2015, set the pay for performance award at 0%, as it had been for the previous several years. Where the 0% performance pay would result in a reduction of earnings, a lump sum would be available in the same amount as the lump sum paid in 2011, "subject to the rules in any written compensation policies issued by the Public Service Commission."

20Mr. Rotondo correctly states that Directive 33-54 does not explicitly say that an employee has to be in a managerial position as of April 1, 2015 to have the benefit of the lump sum payment there described. Although that is true, rules related to the application of Directive 33-54 appear in a subsequent document entitled "Compensation Policy and Eligibility Procedures 2015", effective November 20, 2015, in which criteria for eligibility were elaborated. Important to this dispute, this document provides that, in order to receive a lump sum in 2015, the employee had to continue to be in a non-bargaining position on the last day of the 2014-15 fiscal year, i.e. March 31, 2015. The employer’s position is that this criterion was not met, as Mr. Rotondo was still in an AMAPCEO position on that date.

21By contrast, Mr. Rotondo argues that he does meet that eligibility criterion because he retained his non-bargaining home position during his promotional assignment between August 2014 and May 2015, including the date at issue, March 31, 2015.

22In order to resolve the dispute between the parties as to the eligibility criterion of being “in a non-bargaining position on the last working day of the 2014-15 fiscal year”, one must interpret the phrase in light of all the circumstances and applicable contractual provisions. Although Mr. Rotondo’s interpretation is understandable, it is my view that the employer’s is more consistent with all of the policy provisions read together. In particular, the Pay on Assignment policy makes clear that pay treatment generally goes with the position to which the employee is assigned and working at any given time. For example, Section 6 of that policy provides as a governing principle: “Employees are paid for the work they do in their jobs in keeping with the class of the position to which they are assigned.” [Emphasis added.]

23Although Mr. Rotondo clearly retained rights in relation to his home position while assigned to the AMAPCEO position, I do not find that he was “in” his home, or any non-bargaining unit position, on March 31, 2015 for pay purposes. Accordingly, I do not accept that he met the initial eligibility criteria in "Compensation Policy and Eligibility Procedures 2015" to which the entitlements in Directive 33-54 were explicitly made subject.

24The second Directive, 33-55, also dated November 17, 2015, is more detailed, and represents the employer’s move away from the type of lump sum payments dating back to 2011, which were in the same amounts as an employee’s lump sum in the previous performance cycle, and varied considerably between individuals, but did not vary with performance in any recent performance cycle. The second directive provides two alternative types of pay improvement. The first is applicable to a public servant appointed to certain non-bargaining unit positions as of April 1, 2015. Mr. Rotondo does not meet this criterion as he was not appointed to a non-bargaining unit position on that date, as he was still in an AMAPCEO position.

25Directive 33-55’s alternative pay adjustment was for those who did not receive a lump sum under Directive 33-54, and who were in a non-bargaining unit position on or after April 1, 2015 and before December 14, 2015. Because Mr. Rotondo returned to his non-bargaining unit position in May, which falls between those dates, he was eligible for that pay adjustment. This provided for a 5% adjustment to the position’s base salary in effect on March 31, 2015. To the extent the adjustment brought an employee’s salary over the salary range maximum for the employee’s position in effect on April 1, 2015, it was payable as a lump sum, not to be included in any pensionable earnings calculations. Mr. Rotondo acknowledges that he did receive this 5% adjustment in his home position.

26Counsel for the employer observes that the compensation directives apply in a moment of time, and timing of movements such as secondments, acting assignments or retirements, can mean that some provisions apply to an individual, and others do not. In this respect counsel refers to Davis v Ontario (Community Safety and Correctional Services), 2016 CanLII 41663 (ON PSGB) (Nairn), in which the complainant had taken on an acting superintendent role, at a time when the application of the relevant policies left him at a lower pay rate than others who were doing the same job. Where the Board found that the policies had been applied correctly, no breach of the complainant’s terms and conditions of employment was found.

27Similarly, in this case, I am not persuaded that there has been any breach of Mr. Rotondo’s terms and conditions of employment. Rather, the successive application of the relevant policies to his situation has left him with a current salary that may be less than others of his colleagues, even those with less tenure than he, but has not been shown to be incorrect given the timing of his individual movements in and out of his home position. Without a specific term or condition related to pay which has not been applied properly, the Board is not in a position to “fix” Mr. Rotondo’s pay issue.

28At various times during his submissions, Mr. Rotondo expressed frustration at the errors that were initially made in his pay, and at the lack of transparency and clarity about the application of the policies in question. It appears that even the Human Resources personnel charged with answering Mr. Rotondo’s inquiries about his pay were not provided copies of the full directives and policies, so it is not surprising that mistakes were made in their application, and explanation to him. Mr. Rotondo, like complainants in other recent cases before the Board, had to file a complaint to actually see the documents which contained the terms and conditions of employment which applied to him. Mr. Orsini’s memo, which contained none of the detailed rules for eligibility which determined this case, appeared to have been the only document available to him in respect of the 2015 changes until he received the policies through this complaints process. For the future, it is hoped that action will be taken to ensure that managers have ready access to all the terms and conditions of employment applicable to them, so they can have the necessary information on which to base informed decisions about what is and is not a breach of those terms, which has the potential to reduce the necessity of litigation, with the attendant costs to both parties.

29For the above noted reasons, I am not persuaded that Mr. Rotondo has been incorrectly paid in accordance with the applicable pay policies. In the result, the complaint is dismissed.