IN THE MATTER OF AN ARBITRATION, PURSUANT TO THE B.C. LABOUR RELATIONS CODE. INSURANCE CORPORATION OF BRITISH COLUMBIA (the Employer or ICBC )

Transcription

1 IN THE MATTER OF AN ARBITRATION, PURSUANT TO THE B.C. LABOUR RELATIONS CODE BETWEEN: AND: INSURANCE CORPORATION OF BRITISH COLUMBIA (the Employer or ICBC ) CANADIAN OFFICE & PROFESSIONAL EMPLOYEES UNION, LOCAL 378 (the Union ) (General Salary Increases for Employees on Salary Regression) AWARD ARBITRATOR: COUNSEL for the EMPLOYER: COUNSEL for the UNION: JULIE NICHOLS CHRIS LEENHEER STEPHEN VON SYCHOWSKI DATE of SUBMISSIONS: NOVEMBER 8 and DECEMBER 5, 2013, JANUARY 7 and FEBRUARY 3, 2014 DATE of AWARD: MARCH 17, 2014

2 1 INTRODUCTION This dispute relates to the interpretation of Article 11 of the collective agreement in relation to whether general salary increases apply to employees who have been transferred to a lower paying job for health reasons and are in salary regression. The Union takes the position that the Employer has improperly denied general salary increases to employees in these circumstances. The Employer argues that the salary protection in Article is a form of red-circling, as defined in Article 11.19, and employees who are being paid in excess of the rate for the job they are performing are not entitled to general wage increases, pursuant to Article The parties agreed to proceed by way of written submissions. The Union s submission, dated November 8, 2013 included the Union s grievance and the Employer s Stage 3 response. I also received the Employer s submission, dated December 5, 2013, and the Union s reply submission, dated January 7, In response to my request, the Union provided a copy of the Collective Agreement with certain provisions highlighted on February 3, The Employer advised that it would make no further submissions on February 28, COLLECTIVE AGREEMENT The parties have referred to the following provisions of the collective agreement: Pay on Transfer to a Lower Level Job for Health Reasons An employee who transfers to a lower graded job as a result of poor health will have her/his salary regressed at a rate of one salary step per year at each anniversary of the commencement in the work at the lower level job until her/his salary is reduced to the maximum of the lower graded job. An employee who returns to work full-time to a lower graded job under the rehabilitation program of the LTD Plan shall receive the normal salary for the job classification for all hours worked (i.e. no more than the maximum step of the salary group for the job classification). The difference between this present salary and her/his salary prior to disability will be paid through LTD benefit to provide up to 100% of her/his previous net pay, or to a lesser amount as may be determined by the maximum benefit payable through the LTD Plan. An employee who returns to work part-time under the rehabilitation program of the LTD Plan shall receive the normal salary for the job classification for all hours

3 2 worked (i.e. no more than the maximum step of the salary group for the job classification). The difference between this present salary and her/his salary prior to disability will be paid through LTD benefit to provide up to 85% (prorated) of her/his previous net pay. Subject to changes being acceptable to the carrier Application of Wage Increases to Red Circled Salaries (a) If an employee s salary is in excess of the maximum salary for her/his position (i.e. is red-circled) prior to the granting of a general increase and her/his present salary becomes less than the new maximum for the range after applying the general increase to the range, she/he will receive the difference between her/his present salary and the new maximum of the range. She/he will receive the full value of any subsequent general increases during the term of this Agreement unless her/his salary again becomes red-circled prior to the granting of a subsequent general increase, in which case the treatment set out in this Article 11.18(a) will apply. (b) If an employee s salary is in excess of the maximum salary for her/his position (i.e. is red-circled) prior to the granting of a general increase and her/his present salary continues to be more than the new maximum for the range after the general increase has been applied to the range, her/his salary will remain unchanged. At such point as her/his salary falls within the range as a result of the application of a subsequent general increase during the term of the Agreement, she/he will be treated as in Article 11.18(a) preceding. (c) Notwithstanding Articles 11.18(a) and 11.18(b), an employee whose salary is red-circled as a result of the application of Article 10 (Job Evaluation) will receive 100% of any general increase applied within a twelve (12) month period following the re-evaluation. Thereafter, the employee will receive 70% of all subsequent general increases, or the difference between her/his salary and the new maximum for her/his range after applying the general increase, whichever is greater Definitions (b) Red-circled treatment where used in this Agreement means that an employee will retain her/his established salary but will not be entitled to any further salary increases until the maximum of the salary range for her/his job classification equals or exceeds her/his salary.

4 3 POSITION OF THE PARTIES UNION The Union takes the position that all employees must receive general wage increases, unless there is an explicit exclusion in the collective agreement. It submits that Article does not apply as it exclusively refers to redcircling, which is distinct from salary regression. It notes Article does not refer to salary regression or to Article 11.11; rather, it specifies its application to red-circling through the reference (i.e. is red-circled). The Union says the parties have consistently used the abbreviation i.e. (or that is ) for the purposes of specification. In contrast, they have consistently used e.g. to refer to examples. Employees undergoing salary regression have their salaries reduced by one step each year until their salary reaches the maximum for the lower level job. This, says the Union, is the inverse of the concept of red-circling. By attempting to graft the concepts, the Employer is seeking to achieve a result that was not obtained in bargaining. Further, on the Employer s interpretation, employees on salary regression would face salary reductions each year and an additional loss of earning power in light of the rising cost of living. It argues that such an interpretation would penalize vulnerable employees and would be unfair and discriminatory. In its reply, the Union submits that Article is a provision that provides an exact mechanism for employees undergoing salary regression in specific and limited circumstances, which is not a part of Article 11.19(b). It argues that Article 11.19(b) is not a general provision that applies to or alters the specific provision for salary regression. It maintains that a general salary increase is applied to all employees, except where expressly limited by the collective agreement. Here, there is no provision that expressly limits the application of general increases to employees on salary regression under Article The Union views the Employer s interpretation as a unilateral and arbitrary decision which unjustly enriches the Employer to the detriment of vulnerable employees. With respect to the estoppel issue, the Union submits that it was not aware of the Employer s application of the language until shortly before the grievance was filed (a small number of people were affected) and, had it been aware of the practice, it would have grieved the matter.

5 4 EMPLOYER The Employer submits that Article provides a form of salary protection as it allows an employee who has transferred to a lower paying job for health reasons to maintain their salary at a level above that for the lower paying job. It says the protection in Article lessens the blow as the salary reduction is implemented over a period of time, rather than all at once. It maintains that red-circling is generally understood to be a type of wage protection which allows an employee to retain a higher rate of pay while holding a lower paying position. Accordingly, it submits that Article is a form of red-circling, both in that general sense and as defined in Article 11.19(b) of the collective agreement. The Employer argues that, under Article 11.19(b), an employee retains her/his established salary. In the context of Article 11.11, an employee s salary is established each year of the regression process. Therefore, if there is a general wage increase while an employee is under salary regression, their established salary at the step they are placed in remains unchanged. The Employer submits that Article 11.18(b) is clear and unambiguous and provides that employees who are being paid in excess of the maximum salary for the job they are performing do not receive general wage increases. It says that given the provision is not restricted or defined in terms of its application, it must apply to any situation where an employee s salary is in excess of the rate for their position. It submits that the Union is seeking a monetary benefit that is not supported by the language of the collective agreement. The parties have clearly expressed when a general wage increase will apply in situations of salary protection. Where the employee is being paid in excess of the rate for their position (including situations under Article 11.11), Article and provide that no general increases are to be paid. The Employer says it is not legally required to pay a higher rate of pay for work than that which is established for a particular job in the collective agreement, pointing out that it is not required to provide salary protection even when accommodating disabled employees in a lower paying job. Further, the Employer submits that it is not penalizing employees. Rather, by agreeing to incremental salary regression, it is already paying in excess of its legal obligations as it is paying for work that is not being performed. It maintains that the Union s interpretation would penalize the Employer and a

6 5 requirement for ICBC to pay more would require clear language in the agreement. The Employer notes that the only general increase that is not applied is the increase that is applicable to the employee s current step. That is, the salary grid is not treated as a snapshot at the time the employee transfers to a lower job. Employees receive any general increases that were applied to a step before they regressed into it. The Employer says that it has consistently applied its interpretation of Article since it was introduced into the collective agreement in 2003 and its practice supports its interpretation. Further and in the alternative, it says the Union is estopped from taking the position it has given that it has not raised the issue in bargaining. The Employer took no position in relation to the Union s assertion that it only became aware of the practice shortly before the grievance was filed. DISCUSSION & DECISION This case involves the interpretation of Articles 11.11, 11.18(b) and 11.19(b) of the collective agreement. The fundamental purpose of collective agreement interpretation is to determine the mutual intention of the parties in relation to the language in question. There are a number of well-established interpretation principles that are of assistance here, including that the words of the provision should be given meaning; that the collective agreement should be interpreted harmoniously such that absurdities and redundancies are avoided; that the same words should be given the same meaning and the use of different words likely demonstrates that a different meaning was intended; specific provisions usually override general provisions; and, the intention to provide a monetary benefit must be clearly expressed. This dispute turns on the language itself. The parties did not rely upon bargaining history. The Employer says its consistent practice supports the conclusion that the language is clear and unambiguous. In a nutshell, the Employer s general position is that employees who are receiving salary above the rate for the position they hold are not entitled to general wage increases. More specifically, it says salary regression is a form of wage rate protection that falls within the general understanding and collective agreement definition of red-circling and, therefore, Article and 11.19(b) apply. The Union argues Article provides for a very specific

7 6 salary regression process which does not equate to red-circling and Articles and Article 11.19(b) have no application. I accept the Union s proposition that general wage increases are, usually, applicable to all employees, subject to exceptions negotiated by the parties. In this case, the parties have negotiated exceptions. Article 11.18(b) provides that no increase will be given when an employee s salary is in excess of the maximum salary for her/his position (i.e. is red-circled) and if, the present salary continues to be more than the new maximum after the general increase is applied. Article 11.19(b) provides red-circled treatment means an employee retains their established salary but will not be entitled to any further salary increases until the maximum for the job equals or exceeds the salary. In my view, there is a clear intention in Articles 11.18(b) and 11.19(b) that salary increases will not apply to individuals who fall within the circumstances specified. The question is whether those limitations apply to employees who are in salary regression under Article Article allows employees with health issues to deal with salary regression incrementally (over a number of years), rather than face the entire reduction at once. In essence, it mitigates the salary reduction, through an annual regression of one step. For example, as I understand it, an employee at Step 5 would, on the anniversary in a lower paying job, go down to Step 4. The Employer says there is no entitlement to a general increase where the employee s salary remains above the maximum salary for the position they hold further to Article 11.18(b), which, for convenience, provides: If an employee s salary is in excess of the maximum salary for her/his position (i.e. is red-circled) prior to the granting of a general increase and her/his present salary continues to be more than the new maximum for the range after the general increase has been applied to the range, her/his salary will remain unchanged. [my emphasis] However, Article 11.18(b) does not provide that an employee s salary will remain unchanged whenever that employee s present salary is over the new maximum salary for the held position, as suggested by the Employer. If that was the case, it would be superfluous to include the reference (i.e. is redcircled). Applying the principles of contract interpretation discussed above, that language must be given some meaning and interpretations resulting in redundancies should be avoided. In that regard, I accept that the parties have consistently used the term i.e. in numerous places throughout their

8 7 agreement for the purposes of further specifying and particularizing the meaning of the language used. Where they have listed examples for the purposes of illustration, they have used the reference e.g.. Given their practice in that regard, the language of the provision does not support the conclusion that the parties intended to reference red-circling as just one situation of where an employee s salary may be in excess of the maximum salary for the position such that the general increase would not be applicable. Rather, the parties have clearly specified that for Article 11.18(b) to apply and limit the application of a general increase, two requirements must be met: first, an employee s salary must be red-circled ; and, second, the present salary must continue to be more than the maximum salary for the position held. Thus, I find that when the provision is read as a whole and all of the words in the article are given meaning, the Employer s argument that Article 11.18(b) applies to any situation where an employee s salary exceeds the salary level for the job held cannot be accepted. That leads to the issue of whether an employee under salary regression falls within the definition of red-circling in Article 11.19(b), such that the limitation in Article 11.18(b) would be applicable. I note that the parties have specified that, in the context of their agreement, red-circling means that an employee will retain her/his established salary but will not be entitled to any further salary increases until the maximum of the salary range for her/his job classification equals or exceeds her/his salary [my emphasis]. Typically, the term red-circling refers to preserving an employee s salary at a specific rate and maintaining that rate as agreed. The language in Article 11.19(b) is consistent with that concept. It protects an established wage rate and specifies when that rate may increase. In my view, the difficulty with the Employer s position is that it does not recognize the distinction between the concepts of retaining a wage rate (in the case of red-circling) and mitigating against salary reduction (through incremental wage regression). The first offers salary protection as the employee continues to be paid the same wage rate that is, the rate is retained. The same cannot be said for an employee facing salary regression. While there may be some interim wage protection as an employee s salary is incrementally reduced (and, therefore, may be above the salary for the position held for period of time), their salary is not retained. In my view, the Employer s argument that, under salary regression, the salary is established each year of the regression process is an interpretation that would strain the general notion of red-circling and runs

9 8 counter the definition in Article 11.19(b) which specifies that wage rates are retained with no temporal limitation. Without some contractual indication that the parties considered the concepts of red-circling and salary regression to be equivalent, there is no basis on which to treat them as the same. It was open to the parties to include salary regression within the concept of red-circling, had they intended to do so. For example, they could have referenced red-circling expressly in Article or limited the application of wage increases in cases of salary regression as they did in Article 11.18(b). Based on the language of the collective agreement, I accept the Union s argument that salary regression is a concept that is distinct from red-circling and is one that has been specifically addressed by the parties. Therefore, I conclude that Article 11.18(b) does not apply. I find more support for this conclusion when I consider the words of Article which specify how salary regression will occur. The regression occurs at a rate of one salary step per year at each anniversary of the commencement in the work at the lower level job until her/his salary is reduced to the maximum of the lower graded job. That is, the salary regression follows and is tied to the established wage structure. However, the Employer s interpretation would mean that the employee on salary regression at Step 4 (in my example above) would not get a general wage increase when it is applied to Step 4 and other employees at that step receive it. As a result, the employee on salary regression would not receive the wage rate identified for their salary step within the structure. Instead, they would receive an amount that is less than the rate for the step they were at. This, in effect, establishes two different rates for the step. Such an interpretation is inconsistent with a salary regression process that is tied to established steps of the wage structure. It was open to the parties to agree to a process that allowed for unique wage rates during salary regression, however, there is no indication that they did so in the language of Article I note further that applying general wage increases to employees on salary regression does not undermine the purpose of Article (i.e., gradual salary reduction) as the salary of the employee continues to decrease relative to their original wage rate and the gap between the regressing salary and the maximum wage for the position held continues to diminish.

10 9 In the alterative, the Employer has argued that the Union is estopped from taking the position it has because the language has existed since 2003 and it has not raised this matter in bargaining. Given the uncontested assertion that the Union only became aware of the issue shortly before the grievance was filed, I do not find that it made an unequivocal representation in terms of its acceptance of or acquiescence to the practice such that its grievance should be barred on the basis of the equitable doctrine of estoppel. Accordingly, the grievance succeeds. I conclude that the Employer s interpretation and practice is inconsistent with the language of the collective agreement and must cease. Given that I have not received full submissions on the issue of remedy, I return that issue to the parties to address and remain seized should they be unable to reach agreement. DATED: March 17, 2014 Julie Nichols, Arbitrator