PSGB# P-2017-3151; P-2017-3253; P-2017-3254; P-2017-3346; P-2017-3348;

P-2017-3349; P-2017-3350; P-2017-3732; P-2017-3733; P-2017-3734; P-2017-3735;

P-2017-3794; P-2017-3795

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE OF ONTARIO ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

Tremblay et al

Complainant

• and -

The Crown in Right of Ontario (Ministry of Natural Resources and Forestry)

Employer

BEFORE

Andrew Tremayne

Vice Chair

FOR THE COMPLAINANT

Eric Tremblay

FOR THE EMPLOYER SUBMISSIONS

Thomas Ayers Treasury Board Secretariat Legal Services Branch Counsel Written submissions completed: June 12, 2020

Decision

1This decision deals with 13 complaints, each filed by a senior manager in the Aviation Services Section of the Ministry of Natural Resources and Forestry. The complainants say that a salary allowance, which they have been receiving since 2014 and which they allege is a term and condition of their employment, was improperly removed by their employer in late 2017. The employer disagrees, arguing that it was within its rights to issue Management Board of Cabinet Directive 33-66, titled Directive for the Creation of Classes of Position, Salary Ranges, Remuneration and Transition for Middle Managers, which incorporated the complainants’ salary allowances into their base salaries. The employer further argues that the complainants have not identified a term or condition of their employment that has been breached and that the removal of the salary allowances (as it has been described by the complainants) does not amount to a breach of their terms and conditions of employment.

2The employer raised two preliminary objections to the Board’s jurisdiction to hear and determine these complaints. The first objection was about the timeliness of the complaints, and the Board dismissed that objection in a decision dated February 4, 2020: Tremblay et al. v. Ontario (Ministry of Natural Resources and Forestry), 2020 CanLII 20407 (ON PSGB). Following the release of that decision, the parties agreed that the Board would rule on the employer’s second preliminary objection based on written submissions. The Board dismissed the employer’s second preliminary objection, which was that the complaints were, in essence, classification grievances, in a decision dated July 9, 2020.

3When the parties agreed that the employer’s second preliminary objection would be argued in writing, they also agreed that they would exchange written submissions on the merits of the complaints. After carefully reviewing the evidence and the parties’ submissions, the Board finds that the employer breached the complainants’ terms and conditions of employment for the reasons set out below.

Background to the Complaints

4In 2014, the complainants started to receive a special salary allowance, which the employer introduced because Aviation Services was experiencing a retention and recruitment problem. [Note: the complainants who were hired after 2014 started to receive the salary allowance effective their individual dates of hire.] They were paid the salary allowance over and above the normal salary that applied to their classification. The details are set out in Management Board of Cabinet Directive 33-51 under the Public Service of Ontario Act, 2006, titled Directive for the Creation of Salary Allowances and Related Payments (dated January 27, 2014).

5According to documents created by the employer, a salary allowance is an approved pensionable amount paid in addition to an employee’s basic salary rate and under certain conditions. It is paid bi-weekly and is subject to all deductions, including pension contributions. It is included in calculating benefits but not included in transactions arising from a change in status (e.g. promotion) and not included in pay for performance calculations.

6In late 2018, the employer implemented the Management Job Evaluation Project (MJEP). The main objective of MJEP is to standardize job descriptions for managers who are in similar roles across the Ontario Public Service (OPS). MJEP was implemented along with a new compensation plan for managers, which reduced the total number of classification levels and salary ranges. The overall effect was a complete reconstruction of the compensation system for managers, including the complainants. The details are set out in Management Board of Cabinet Directive 33-66 under the Public Service of Ontario Act, 2006, titled Directive for the Creation of Classes of Position, Salary Ranges, Remuneration and Transition for Middle Managers (dated November 15, 2016, and reissued on September 12, 2017, and March 20, 2018).

7In practical terms, MJEP was used to determine the classification level of all managerial positions in the new system. Managers were then assigned to a new “class of position,” each of which has a salary range. A manager’s “pre-MJEP” salary was used to determine their placement on the new salary ranges, and rules for pay administration were devised and set out in Directive 33-66 to assist with the placement. For example, if a manager’s “pre-MJEP” salary was below the minimum of the salary range in effect for the manager’s new class of position, the manager would be placed at the minimum of the new class of position; if the “pre-MJEP” salary were greater than the maximum of the salary range for the manager’s new class of position, the manager’s salary would not increase until the maximum caught up to the manager’s salary.

8Directive 33-66 also says that if a manager received a salary allowance pursuant to Directive 33-51, it was to be included in the “pre-MJEP” salary, effectively rolling it into a manager’s base salary. Going forward, the manager would no longer be eligible for a salary allowance. This provision is of particular relevance to the complainants, because they had been receiving a salary allowance since 2014 (or, if they were hired after that date, effective their individual dates of hire). Moreover, the salary allowance was always paid in addition to their regular salary and was shown as a separate “line item” on the complainants’ biweekly pay stub.

9While Directive 33-51 was not rescinded, Directive 33-66 says that it prevails in the event of any conflict between the two:

Conflict

10. In the event of a conflict between this Directive and MBC Directive 33-51 or any policy, procedure or directive issued by Management Board of Cabinet or the Public Service Commission regarding reclassification or assignment applicable to public servants set out in Schedules 1 and 2, this Directive prevails.

(Directive 33-66, November 15 ,2016)

10The complainants frame their position as follows: the employer improperly “removed” their salary allowance, contrary to their terms and conditions of employment. They argue that by including the amount of salary allowance in the calculation of the “pre-MJEP” salary, the employer’s new compensation system has worked to their financial disadvantage. Instead, the employer ought to have transitioned them to the new system without consideration of the salary allowance, then placed them in the appropriate salary range based solely on their base salary. The salary allowance should be added to their total compensation at the end, argue the complainants, as it was before MJEP was implemented.

Statutory Framework

11It is useful to briefly review the Board’s statutory framework to place the parties’ submissions in context. The Board only has the powers granted by the Public Service of Ontario Act, 2006 and the regulations made under that legislation, notably Regulation 378/07, which states as follows:

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,

[emphasis added]

The threshold issue between the parties is therefore whether the salary allowance is “a working condition or . . . term of [the complainants’] employment” to which the complainants were entitled. The next issue is whether it was improper for the employer to remove the salary allowance (or, perhaps described more accurately, to no longer treat the salary allowance as a separate and distinct component of the complainants’ total compensation). Finally, if the facts disclose a breach of the complainants’ terms and conditions of employment, the Board must address the issue of whether it can provide a remedy, and if so, in what form. The complainants bear the onus of demonstrating that there was a breach of the terms and conditions of their employment.

12A review of the Board’s case law in this area shows how the Board has interpreted and applied this aspect of its statutory mandate. In Ransome v. Ontario (Ministry of Health and Long-Term Care), PSGB# 2005-2314 (2006), the complainant’s main concern was that other managers, who were promoted after he was, were being paid more than him. This was because the employer’s Pay on Assignment policy provided for a minimum 3% increase on promotion, and managers who were promoted out of the bargaining unit after the complainant had received significant wage increases, which resulted in a higher “entrance salary.” The managerial ranks, on the other hand, had received smaller increases, so this produced a gap between the complainant and his co-workers. Although there was abundant evidence of employer policies and directives that spoke of consistency, fairness, and equity, the Board found that there was no specific language that entitled the complainant to what he was claiming, which was not to be paid less than others promoted after him. The Board concluded that the complaint could not succeed, and in the final paragraph of its decision, said this:

[T]he employer is entitled to set the terms of employment for managers in light of its estimation of what is required to retain sufficient competent staff, and the Board is not entitled to “remedy” a situation unless it finds a breach of an established term or condition or employment, or a sufficient basis to conclude that the employer conduct is arbitrary, in bad faith, or discriminatory in the sense of based on some illegal ground.

(Ransome, page 8)

13In reaching this conclusion, the Board set out its analysis and made several important observations:

The issue is primarily a question of contract law. The Board must answer the question: Is it a term or condition of the grievor’s contract with the employer that he should be paid the additional money he claims? It is clear that there is no specific provision which the grievor has identified that would entitle him to the significant wage increases he claims. His grievance is rooted instead in the general statements in the employer policy and guidelines about fairness and equity, which for the purposes of this motion will be assumed to form part of the grievor’s contract of employment. However, they are general statements of intention, with no promise to the grievor that sufficiently addresses his claim.

(Ransome, page 6)

Especially in the managerial setting, where contracts of employment are not collective, but individual, it is not enough to say that it is fair or would be more fair if a grievor was paid more, or not less, than some other employee. In order to succeed, a grievance must show that the difference is improper, either because it offends a specific term or condition of employment, or some more general principle of law.

(Ransome, page 7)

What he argues is that there should be a term or condition of his employment that would ensure he was paid better than those promoted or hired later. This is a complaint about the absence of a term or condition of employment of the kind he would like, rather than a request to remedy a breach of an identifiable existing term or condition of his employment. The facts before me simply do not form a sufficient basis for such an argument to succeed. What the grievor is claiming would be tantamount to creating a term or condition of employment, rather than awarding a remedy for the breach of an existing term or condition of employment.

(Ransome, page 7)

14In another case involving a similar issue, (D’Intino v. Ontario (Ministry of Community Safety and Correctional Services), 2017 CanLII 47392 (ON PSGB)) the Board found that while general policy statements created expectations supporting the result that the complainant was seeking, specific limitations in the policies that applied to him meant that he had been paid correctly. See also Rotondo v. Ontario (Ministry of Community and Social Services), 2017 CanLII 39681, where the Board found that the employer’s policies had been applied correctly, even though their successive application to the complainant left him with a salary that was less than some of his colleagues. The Board dismissed both of these complaints.

15The Board’s decision in Hill et al. v. Ontario (Ministry of Community Safety and Correctional Services), 2006 CanLII 30740 (ON PSGB), involved an issue similar to Ransome. The complainants had been promoted out of the bargaining unit, and they argued that the employer had promised, but failed, to maintain their wages at an ongoing rate of 3% above the salary maximum of the classification of the employees who reported to them. The employer argued that there was no breach of any term or condition of the complainants’ employment. The Board framed the issue as follows:

As noted at the outset of this decision, the issue to be determined is whether there is a term or condition of the grievors’ employment entitling them to an ongoing 3% differential above the Correctional Officer rate, or that of their direct reports. This is essentially a question of contract law. Is it part of the grievors’ contract of employment that their salary should always be 3% above that of the correctional officers they supervise? In order to be successful in this case, the grievors must show that the employer offered and agreed to that provision.

(Hill et al. page 10)

16The Board found that while there were policies that spoke to an initial differential of 3% upon promotion, the documents said nothing about a commitment to maintain that differential on an ongoing basis. Other statements that had been made by representatives of the employer were found to be ambiguous and overall did not support the complainant’s position. The Board considered this evidence and said the following:

As well, if one looks for the interpretation of the different formulations in evidence which gives as harmonious a reading as possible, of them all, read together, the evidence does not support a finding that the employer offered and agreed to an ongoing differential of 3% over the maximum of the CO2 salary grid, which is what the grievors claim. Rather, it seems more likely that the offers being made referred to treatment on promotion, rather than an ongoing differential with salary increases triggered by increases bargained with the union.

(Hill et al. page 13)

The Board found that its authority was limited to enforcing existing terms and conditions of employment and that there was no enforceable promise of an ongoing differential of 3% over the bargaining unit pay rates.

17In MacDonald et al. v. Ontario (Ministry of Community Safety and Correctional Services) PSGB# 2012-4718 et al. (2014), a group of Operational Managers raised two issues: salary compression with Correctional Officers, and salary inequity as compared to retired Operational Managers who had been rehired on contract. As in Ransome and Hill, the remedy sought for the salary compression was an across the board increase to reinstate a 3% difference between the top-level Correctional Officers and the bottom level Operational Managers. An additional increase was sought to bring the complainants’ compensation to the same level as the rehired retired managers. The employer asked the Board to dismiss the complaints without a hearing on the merits because the Board did not have the authority to issue remedial orders of that kind. That is, even if all of the facts asserted by the complainants were true and could be proven, there was no prima facie or viable case of a breach of a term or condition of employment that the Board could remedy, argued the employer.

18The Board found that there was no evidence of any policy, legislation, practice, or other term or condition of employment which provided for the complainants to be paid in the manner sought and that was in force at the relevant time. The complainants had relied on a 2003 statement by the Deputy Minister that all institutional managers should be compensated 3% above their direct reports as well as two intervening temporary compression wage adjustments, and the Board found no evidence that these were still in effect several years later. In doing so, the Board reviewed its test for whether there had been a breach of a term or condition of employment:

17As noted in earlier decisions of this Board, in order for the Board to be able to award a remedy to a complainant, there must first be an existing term or condition of employment related to the facts complained of, something that is part of the complainant’s contract of employment. This is something more than a belief that something is unfair, no matter how deeply held. Secondly, there must be a breach of that term or condition of employment, and thirdly, there must be a link between that breach and a remedy that the Board is empowered to give.

Parties’ Submissions

19The complainants submit that the salary allowance formed part of the terms and conditions of their employment. The combination of the supporting documentation, including written offers of employment, plus the clear and well-defined descriptions of the salary allowance that can be found in the employer’s documents, clearly demonstrate that the salary allowance was intended by the employer to form part of the terms and conditions of their employment, the complainants argue.

20The salary allowance was also meant to be permanent. If it was not, then the employer would have placed a sunset clause on the allowance as a condition to ensure that there would be no recourse should the employer decide to rescind it at a future date. No sunset clause was in place or implied, submit the complainants.

21The fact that the salary allowance was separated in every possible way and was excluded from various calculations that were tied to the base salary (such as overtime) shows that the allowance was a measure that was intended to be tied to their positions and to permanently reside with those positions. Even the complainants’ pay stubs show that the allowance was a separate item, they submit.

22The reason for the separation is simple, argue the complainants. If for some reason, the incumbent was no longer able to satisfy Transport Canada of their ability to hold the position, they would be removed from their position and simply revert to a manager at their pay level and forfeit the salary allowance. For example, if a Chief Pilot does not pass their regular aviation medical examination, they can no longer hold that position or pilot an aircraft. If an Engineer loses their license, they would be unable to hold one of the required positions in maintenance. The employer would then be obligated to accommodate that individual at their regular wage minus the allowance tied to the position. In other words, receipt of the allowance was conditional on the managers’ ability to continue to hold one of the key positions.

23The employer started paying the complainants a salary allowance because Aviation Services was experiencing a retention and recruitment problem. The details are set out in Management Board of Cabinet Directive 33-51 under the PSOA 2006, titled Directive for the Creation of Salary Allowances and Related Payments (dated January 27, 2014). Schedule 1 of the Directive lists the relevant position titles and salary allowance amounts:

Salary Allowances A1P, A2P, AJP, A4P, A5P (Ministry of Natural Resources Aviation Services Management)

Effective April 1, 2014, a public servant who is employed in the Ministry of Natural Resources, Aviation Services and who occupies a position in the Management Compensation Plan as listed below, shall be paid in addition to his/her regular salary the following, per annum:

Salary Allowance

Position Title

Salary Allowance Amount

A1P

Operations Manager (Federally regulated position)

$9,444

A2P

Chief Pilot (Rotary & Fixed Wing) (Federally regulated position)

$10,901

A3P

Senior Pilot

$10,171

A4P

Chief of Aircraft Maintenance Engineer (Federally regulated position)

$10,901

A5P

Senior Air Maintenance Engineer

$8,867

24Concerning correspondence from the employer that sets out the attributes of the salary allowance and how it would apply to the complainants, Mr. Tremblay pointed to several emails he received before he was hired. In the first email, the Operations Manager of Aviation Services asks an HR Advisor to describe how the salary allowance works:

Hi Sean,

Can you please confirm the information that Amy has provided on how the salary allowance works. Can you provide a salary that Eric would be at as the chief pilot with 5 percent added to his salary and allowance. Can you also advise what level of approval would be required to approve this increase in salary?

Thanks

Bob

The reply is as follows:

Hi Bob,

Amy is correct that the 5% promotional increase is separate from the salary allowance. So with the 5% added to his current salary then he would start in the Chief rotary Wing Pilot (TEN20) at $90,860.

The salary allowance of $10, 901 is in addition to the employee’s regular salary, per annum, in accordance with certain conditions as specified in the terms of the allowance.

They are applied to an employee’s bi-weekly salary.

Salary allowances are:

• Subject to all deductions (e.g, pension contributions) including any pay reductions occurring as a result of unpaid leave or reduced pay,

• Included in calculating benefits (e.g. termination payments and insured beneflts],

• Not included in the calculation of premium payments (e.g, overtime during an emergency), in the event that premium payments apply to this group,

• Not included in transactions arising from a change in status (e.g. promotion),

• Not included in the calculation of performance pay.

Mike can approve the 5% promotional increase

Hope this helps.

Regards,

Sean

Mr. Tremblay was copied on these emails, and he says he took this information into account when he decided to accept the job offer from the employer, which followed soon after.

25On May 26, 2014, Mr. Tremblay received a letter offering him the position of Chief Rotary Wing Pilot with the Ministry of Natural Resources. The portion of the letter that is relevant to the complaints reads as follows:

Your start date is May 26, 2014. This position is full-time at 36.25 hours per week and is classified at the TEN20-A2P – Engineering & Surv Supp TM 20 level, in the Ontario Public Service (OPS). Your position is part of the Management Compensation Plan (MCP) group. The current salary range for this classification is $84-363.00 - $105,200.00 per year and your starting salary will be [redacted] per year plus the annual salary allowance A2P of $10,901.00 paid biweekly. You may be eligible for Pay for Performance on April 1, 2015 to allow for further salary progression. Eligibility for salary progression is based on performance in the position and subject to salary administration provisions in the Management Compensation Plan group.

The letter is signed by the Operations Manager of Aviation Services, and Mr. Tremblay signed and dated a copy beneath the statement “I have read, understood and accepted the terms and conditions of employment as outlined above,” which appears at its end.

26The complainants submit that these documents show that the biweekly payment of an annual salary allowance that was separate from their regular or base salary was a term and condition of their employment. The salary allowance was not an abstract promise or a vague expectation. It was a “black and white” component of their total compensation package that was offered to them and which they accepted. The employer used the salary allowance to attract and retain individuals who could qualify for and hold positions with unique requirements under Federal Law, most of which are found in Transport Canada regulations. Compensation is at the core of any employment agreement, argue the complainants, and it forms the foundation of the terms and conditions of work. The complainants agreed to provide their services to the employer in exchange for a total compensation package, and the employer is now attempting to exempt itself from the terms and conditions that were agreed to.

27On November 7, 2017, Mr. Tremblay and many of the complainants participated in a conference call led by their Director to learn about MJEP. There were about 150 people from their division listening in on the call from many different locations. At the end of the call, he and the other Aviation Managers were asked to stay while others left. They were given a 2 page handout titled "Key Messages for Management Pilots and Aviation Maintenance Positions in Receipt of Salary Allowance." The Director told them to read the handout, and that if they had any questions, they should contact HR. Mr. Tremblay did so, and he was told that more information would be forthcoming.

28Next, Mr. Tremblay received an email dated November 15, 2017, advising him of the classification outcome for his position based on MJEP. He was told that his new classification was M09 and he was told his salary range for two periods: from April 1, 2017 to September 30, 2017; and October 1, 2017 to March 31, 2018. The email also said the following:

Salary and Classification information will begin to be reflected in WIN on November 13th under the "Job Information" tab. Classification and compensation changes are anticipated to begin on November 30th. However, there will be some exceptions. Employees with more complex position/salary histories will be processed in subsequent pay periods.

29The email had some additional information for employees who were receiving a salary allowance:

For those employees in receipt of a salary allowance

You may be aware that, since 2014, salary allowances were provided to certain management pilot and aviation maintenance positions, Treasury Board Secretariat was directed to eliminate salary allowances when implementing MJEP.

To accomplish this, the annual value of the salary allowance will be added to the base salary of employees who were receiving the allowance, prior to the employees being placed in the salary range for their new MJEP classification level.

Because employees in this group have a more complex salary scenario, your pay will be processed for a pay period after November 30.

If you have any questions, you are encouraged to speak with your director and to visit the MJEP website for more information.

The MJEP Team

Job Evaluation Initiatives Branch

HR Service Delivery Division

30Mr. Tremblay says some of the information in the email was different than what he had been told on November 7, 2017 conference call and in other presentations, specifically that there were now "exceptions" and that the dates when the changes were supposed to be visible in WIN no longer applied to employees with "more complex" situations.

31Mr. Tremblay says that after November 16, 2017, he checked WIN every day to see if anything had changed. He understood that the other complainants were doing so as well. The first time he saw a change was on December 12, 2017, because this was the day when he saw changes to his WIN account. On that day, he saw his pay stub for the December 28, 2017 payday, and it was clear that his compensation had changed. Before that date, the amount of his salary allowance had been shown beside a line that read “Salary Allow Chief Pilot,” and his base pay was shown beside a line that read “Regular Pay.” On his pay stub for the December 28, 2017 payday, the line for “Salary Allow Chief Pilot” said “0.00” and the bi-weekly amount for the salary allowance had been added to the “Regular Pay” line.

32Post-MJEP, adding the salary allowance to their base salary has changed their total compensation, the complainants say. They submit that this has led or will lead to the following for some or all of them: pay freezes for up to five years, ineligibility for in-range salary increases, and/or ineligibility for base salary adjustments. The salary compression issue that the salary allowance was designed to address has returned, they argue.

33It is the employer’s position that the Board cannot conclude that the provision of a salary allowance, as a separate and distinct item from the employee’s base salary, was a separate term or condition of the complainants’ employment. The employer submits that neither the offer letter nor Directive 33-51 constituted a representation that the salary allowance would continue as a separate payment to the complainants in perpetuity. There was no offer of such a term from the employer, and there was no acceptance of such a term. As a result, there is no identifiable term or condition that the complainants can point to that was breached by the employer.

34Under the PSOA 2006, Management Board of Cabinet can create and set directives that determine salary ranges, wage ranges, and other remuneration for public servants appointed by the Public Service Commission. Accordingly, the PSOA 2006 grants the Management Board the ability to determine pay - whether by granting it, denying it, or altering it - for public servants. The complainants became members of the Management Compensation Plan when they accepted their new positions, and they became subject to future directives from Management Board which would apply to their compensation. This alone should be sufficient for the Board to find that the complaints must fail, submits the employer.

35It is equally valid that changes to compensation are a regular occurrence for public servants in managerial positions, the employer submits. There are also numerous examples of this in the Board’s jurisprudence, where managers have filed complaints about these measures, including wage freezes and the denial of pay for performance. There is no reasonable way to conclude that the complainants were not aware of the compensation practices in the OPS.

36The employer ensured that the total compensation package provided to each complainant did not decrease as a result of Directive 33-66. The complainants allege that they suffered a loss, but the complainants have not experienced any reduction in compensation. Instead, some of the complainants have simply not been provided with the same opportunity for progression that they expected they might have in the future. The new compensation calculations for the complainants were applied consistently, equitably, and following Directive 33-66, and the complainants were protected from any reduction in their compensation, argues the employer.

37The complainants appear to object to the employer’s ability to make changes under Management Board directives, even though an earlier directive was required to provide them with their original salary allowances. There is no way to conclude that the complainants did not know, or should not have known, that a future directive could otherwise alter the salary allowance. Furthermore, the employer submits, even if the complainants did not have this knowledge, the complainants could not create terms or conditions of their employment through a lack of understanding of applicable policies and processes.

38The complainants object to the fact that their salary now includes the salary allowance, as opposed to the salary allowance being considered separate from their base salaries. However, what they allege to be a term or condition of employment in their offer letter was never represented to be a permanent term or condition of employment that required the employer to calculate this as a separate compensation item for the duration of their employment with the OPS.

39Instead, the employer made a change to the administration of the salary allowance, in accordance with a Management Board of Cabinet directive issued pursuant to the PSOA 2006, which did not breach any identified term or condition of employment, the employer argues.

40Finally, the precise language of the offer letter states that the salary allowance is linked to the fact that the complainant “is classified at the TEN20-A2P – Engineering & Surv Supp TM 20 level.” The letter states, “the annual salary allowance A2P of $10,901.00 paid biweekly.” The language is unequivocal that the salary allowance applies to A2P payment group, submits the employer.

41This is further supported by Schedule 1 of Directive 33-51, the heading of which is “Salary Allowances A1P, A2P, A3P, A4P, A5P”, again clearly linking the salary allowances to the A2P code. It is also reflected in the chart, which sets the separate salary allowance for each of those five classifications. The complainants have not pointed to any document that indicates that this payment classification was a separate and unalterable term of employment, the employer argues. Accordingly, it is entirely logical that when the employees were provided new classifications in the M-class (M07, M08, M09, etc.), the salary allowance under the old payment classifications no longer applied in the same manner.

42For this reason, argues the employer, the complainants cannot be entitled to a term or condition of employment if the provision for granting that alleged term or condition of employment (i.e. the A2P classification) does not exist anymore. The complainants knew from their offer letter that salary allowance arose from them being “at A2P.” Accordingly, the salary allowance was no longer applicable upon the implementation of MJEP.

43Turning to the Board’s case law, the employer submits that while the Board has been clear that it has the jurisdiction to enforce existing terms and conditions of employment, it cannot create new terms or conditions of employment. It has no authority to set wages or compensation. Referring to Ransome and MacDonald, the employer notes that the Board has said that it cannot remedy a complainant’s feelings of unfairness or unhappiness, however genuine those feelings are.

44In Hill et al., the Board concluded that the complainants’ compensation was consistent with the employer’s policies on compensation and that the policies did not provide the specific language to establish the difference that the complainants were seeking. Furthermore, the Board noted that statements needed to be clear and unequivocal to establish an ongoing term or condition of employment-related to compensation.

45The complainants have attempted to frame the issue as one where it was the employer’s obligation to indicate in 2014 that it may make changes to the compensation structure in 2017, argues the employer. They appear to be arguing that the burden fell on the employer to indicate at that time that it may make a future change. They further seem to be arguing that the failure to do so created an ongoing obligation. However, as the above case law indicates, without specific language in the terms or conditions of employment that prohibits the employer’s ability to make such a change, the Board must find that such changes are not breaches of any terms or conditions of employment, and the complainants cannot meet their onus.

46Mr. Tremblay has described his hiring process into the Chief Rotary Wing Pilot position as a “negotiation” where he received a “promise” regarding his salary allowance. However, the employer argues, while the documents show that he was inquiring about various pay provisions at the time of his hiring, they do not disclose any statement wherein the employer stated that the salary allowance, and the separate calculation of his salary allowance from his base salary, was a permanent component of his compensation package, nor any promise that the salary allowance would remain in its current form for the duration of his employment in that position. In fact, the documents demonstrate that all of the complainants were paid appropriately in accordance with the applicable directive at the time. There is no indication that anything improper occurred.

47The employer submits that as a result of MJEP, the salary allowance was incorporated into the complainants’ salaries, and they were all placed appropriately within the salary range, with the addition of that equivalent compensation amount on top of their salary under MJEP. The complainants were initially granted a separate salary allowance pursuant to a directive; however, this was later modified through a subsequent directive.

48The Board has unequivocally found that the employer is entitled to make a variety of changes to the implementation and calculation of payment provisions, argues the employer. The Board has also repeatedly found that the employer is entitled to make these changes retroactively, as opposed to only prospectively. In this case, the employer’s position is that the complainants have not, and cannot, point to a specific term or condition of employment in the documents that entitles them to be paid a specific salary allowance, in addition to and separate from their base salary in perpetuity, and that the employer is precluded from issuing future directives that may affect their employment.

Analysis

49As stated above, the Board only has the powers granted by the Public Service of Ontario Act and the regulations made under that legislation, notably Regulation 378/07. When dealing with the phrase “working condition or . . . term of . . . employment” in subsection 4.(1) of that Regulation, the Board will interpret and enforce existing terms and conditions of employment; however, the Board has been very clear that it is not able to create new terms and conditions of employment. More specifically, the Board will not uphold a complaint if a term or condition of employment applies to other employees but not to a complainant. Nor will the Board craft and apply terms and conditions of employment from vague, abstract, or ambiguous policy statements. The Board will also not revive or extend the application of temporary or remedial terms and conditions that have long since expired. In short, the Board can and will only intervene where there is an alleged breach or violation of an existing term or condition of employment.

50This principle was stated clearly by Vice-Chair O’Neill in Ransome:

The issue is primarily a question of contract law. The Board must answer the question: Is it a term or condition of the grievor’s contract with the employer that he should be paid the additional money he claims?

(Ransome, page 6)

Especially in the managerial setting, where contracts of employment are not collective, but individual, it is not enough to say that it is fair or would be more fair if a grievor was paid more, or not less, than some other employee. In order to succeed, a grievance must show that the difference is improper, either because it offends a specific term or condition of employment, or some more general principle of law.

(Ransome, page 8)

51More recently, in MacDonald et al., supra, Vice-Chair O’Neill set out the test for whether there has been a breach of a term or condition of employment:

17As noted in earlier decisions of this Board, in order for the Board to be able to award a remedy to a complainant, there must first be an existing term or condition of employment related to the facts complained of, something that is part of the complainant’s contract of employment. This is something more than a belief that something is unfair, no matter how deeply held. Secondly, there must be a breach of that term or condition of employment, and thirdly, there must be a link between that breach and a remedy that the Board is empowered to give.

52The history of the salary allowance is central to the complaints and to how the senior managers came to be employed in Aviation Services. The employer introduced the salary allowance in response to a serious retention and recruitment problem in Aviation Services. In the words of one of the employer’s documents, the allowances are “targeted compensation adjustments to address critical compensation issues” for certain positions in Aviation Services that have a variety of unique requirements – unique at least in the Management Compensation Plan group. Many of the requirements are set by Transport Canada, who must “approve” most of the complainants to act in their positions. The managers must also ensure ongoing compliance with six separate Transport Canada operating certificates, among many other duties and responsibilities.

53The salary allowance is different from an employee’s regular salary. It is an approved pensionable amount, included in calculating benefits but excluded from pay for performance calculations. It is also a fixed amount that is paid in addition to the employee’s regular salary. This means that it is isolated from changes to the employee’s salary and that it is not “in the picture” for classifying the complainants’ positions on the employer’s salary ranges, a point which the employer made clear in the complainants’ hiring letters. The employer designed the salary allowance so that it would be attractive to the complainants because the employer needed to address “critical compensation issues” and respond to a retention and recruitment problem. It is clear from the facts of this case that the employer was successful: it attracted and retained the complainants, which solved the employer’s problem in Aviation Services.

54The source of the salary allowance was not a vague, abstract, or ambiguous policy statement. The complainants did not think, believe, or wish that it should apply to them; the salary allowance did apply to them because the employer told them so in more than one document. The facts before the Board are very different from those presented in previous cases, where the complainant was either asking for terms and conditions that applied to others be applied to them, or asking the Board to fashion better terms and conditions out of whole cloth. In some cases, for example where pay for performance was set at 0%, the Board found that an annual (and sometimes retroactive) review was implicit in the existing terms and conditions of employment. In none of those cases did the Board ever find that there had been a unilateral change in the terms and conditions of a complainant’s individual contract of employment, as is the case here. The decisions relied upon by the employer in support of its position are therefore readily distinguished.

55As members of the Management Compensation Plan group, the complainants are not eligible to participate in collective bargaining, so their terms and conditions of employment are set by individual contracts of employment. The basic premise underlying the individual contract of employment is that it continues as long as both parties agree. The mutual consent of the employer and the employee are required to form and, if desired, to vary the terms of the contract. It is clear from the evidence before the Board in this matter that the terms and conditions of the contracts of employment between the individual complainants and the employer come from a number of different sources: the hiring letters, statutory provisions (including the limited ability to file a complaint before the Board), employer policies, and directives issued by Management Board. The terms and conditions are, therefore, a blend of provisions that apply to the entire Management Compensation Plan group as well as other provisions that apply only to a very small subset of this group, including the complainants.

56This case must be viewed within the context of these general legal principles. The employer made offers of employment to the complainants, and the salary allowance was one of the provisions of those offers. When the complainants accepted these offers, the salary allowance became one of the terms and conditions of their employment. Individual contracts (13, to be precise) were formed: one between each of the complainants and the employer. The salary allowance, as designed by the employer, formed part of each of those individual contracts and it attached to the position rather than the classification. As a result, the salary allowance became “a working condition or . . . term of [the complainants’] employment” to which the complainants were entitled.

57The employer devotes a substantial portion of its written submissions to show that it has the authority to issue directives that change the terms and conditions of employment for members of the Management Compensation Plan group, and therefore the complainants. The employer also provided many examples of when it has done this, often using the mechanism of the “pay freeze” or some variation thereof. Neither of these principles was ever in doubt. It is equally clear, however, that when the employer chose to change the terms and conditions of employment for the complainants by removing the salary allowance, the employer did so unilaterally and without their consent. In contractual terms, this amounted to a change to a material term and condition of the individual employment agreements between the complaints and the employer. Using the mechanism of Directive 33-66 to impose its will did not alter the legal consequences of the employer’s actions: the employer unilaterally changed a material term and condition of the bargain that it had struck with the complainants.

58It is also worth noting that there is no evidence before the Board that Directive 33-51 has ever been rescinded, either by Directive 33-66 or otherwise. Rather, Directive 33-66 states that it prevails in the event of a conflict between it and Directive 33-51 (or any other relevant policy, procedure or directive). While this is by no means determinative of the issues before the Board, it does suggest that Directive 33-51, with its listing of the salary allowances that applied to the complainants as listed under their position titles, still exists, despite the fact that the employer has chosen to no longer apply it to the complainants.

59In its submissions, the employer argues that it never said the salary allowance was “a separate and unalterable term of employment”. Moreover, the complainants were never told that the salary allowance was permanent, or that the employer would pay the salary allowance in perpetuity. In other words, argues the employer, it never promised that it would not change the salary allowance, or remove it, or simply take the amount and blend it in with the base salary, such that it would lose the very attributes that were designed to make it attractive to the complainants in the first place. While this is true, it is equally valid that the employer never made those promises about any other aspect of the individual contracts of employment between itself and the complainants. By this reasoning, the employer could have issued a directive reducing the complainants’ base salaries by 50% or cancelling the complainants’ benefit coverage, and still argue that it was free to do so because it had never promised that it would not. The general legal principles outlined above lead to the unmistakable conclusion that the rights and obligations of the parties render this proposition unsustainable.

60I turn briefly to the employer’s argument that by incorporating the salary allowance into the complainants’ “pre-MJEP” salaries, they were all placed appropriately within the salary range and have experienced no loss. The complainants submit that the removal of the salary allowance has led or will lead to the following for some or all of them: pay freezes for up to five years, ineligibility for in-range salary increases, and/or ineligibility for base salary adjustments. The salary compression issue that the salary allowance was designed to address has returned, they argue. The changes to the complainants’ total compensation resulting from the incorporation of the salary allowance into their “pre-MJEP” salaries will affect each of the complainants differently, and some of the changes may not take place for some time. Nevertheless, these are all reductions to the complainants’ total compensation that were unilaterally introduced by the employer without the complainants’ consent. The changes introduced by the employer are no less material because the complainants may not experience the full effects of them for some time. Unilateral changes by an employer to the notice provisions of an employment contract are no less material simply because they do not “kick in” until the end of the employment relationship.

61In this case, the complainants have registered their unequivocal rejection of the employer’s changes to their terms and conditions of employment. They filed timely complaints under the PSOA, 2006. The employer has continued to allow the complainants to work. It has not told them that if they refuse to work under the terms of Directive 33-66, their employment will be terminated. Nevertheless, the salary allowance is “a working condition or . . . term of [the complainants’] employment” to which the complainants were entitled. The employer removed the salary allowance (that is, it refused to continue to treat the salary allowance as a separate and distinct component of the complainants’ total compensation) when it implemented Directive 33-66. The employer did so unilaterally and without the consent of the complainants, and this amounted to a breach of the contract of employment by the employer, which was improper.

62Finally, the Board must address the issue of whether it appropriate for it to provide a remedy, and if so, in what form. In the decisions summarized above, the Board has said that it does not have the power to create or impose new terms and conditions of employment. The Board is nevertheless able to find that the removal of the salary allowance from the complainants was a breach of their terms and conditions of employment, that this was improper, and the Board so finds.

63In its written submissions, the employer proposed that the Board remit the matter to the parties to determine an appropriate remedy and to make appropriate calculations to compensate each of the complainants for the losses that they have incurred to date. In addition, the employer may be able to offer solutions, other than simply restoring the salary allowance, that would remedy its breach and be acceptable to the complainants going forward.

Disposition

64For the reasons set out above, the Board finds that the terms of Directive 33-66 breached the complainants’ terms and conditions of employment.

65With respect to remedy, the matter is remitted back to the parties to resolve. In the event that the parties are unable to do so within 60 days of the date of this award, or such other time as they may agree in writing, the parties may make submissions on the appropriate remedy. In the alternative, the parties may at any time jointly request the Board’s assistance in mediating an appropriate remedy to the matter.

66I remain seized.