SHP686
IN THE MATTER OF AN ARBITRATION
BETWEEN:
CANADIAN PACIFIC RAILWAY COMPANY
(the “Employer”)
AND:
CAW – CANADA AND ITS LOCAL 101
(the “Union”)
(Policy Grievance Benefits While Held Out of Service– SHP686)
ARBITRATOR: Vincent L. Ready
COUNSEL: Ron Hampel
for the Employer
Brian Stevens
for the Union
HEARING: April 17, 2012
Moose Jaw, Saskatchewan
DECISION: June 5, 2012
32697.1
The parties agree that I am properly constituted as an arbitration board with jurisdiction to determine the matter in dispute.
DISPUTE
In this case, the Union challenges the practice of the Company to withhold benefits to employees who are held out of service pursuant to Rule 28 of the Collective Agreement. The matter was initiated by the Parties through Ex Parte Statements of Issue and as such there is no specific grievance or facts in relation to this policy matter.
JOINT STATEMENT OF ISSUE
Ex Parte Statement of Dispute – Company
Dispute
Entitlements to benefits, including Dental Care, Extended Health, Group Term Insurance and Disability Benefit, for the period of time that an employee is held out of service.
Statement of Dispute
The Company has a practice whereby an employee that is held out of service pending an investigation, as contemplated by Rule 28.1, or the rendering of a decision, as contemplated under Rule 28.3, of the Collective Agreement is not entitled to access benefits, including Dental Care, Extended Health, Group Term Insurance and Disability Benefit plans, for the period the employee is held out of service.
Union Position
The Union contends that there is no explicit provision in the Agreement that would allow the employer to impose such punitive measures as to deny negotiated benefits. Additionally, the Union contends that this new policy represents an unreasonable exercise of management rights and the company is attempting to gain such right via by forcing the issue to arbitrations which it ought to properly attempt to obtain through the normal bargaining process. Finally, the Union contends that the employer is estopped from applying such a new policy which denies employees access to negotiated benefit plans.
The Union seeks an order that the company cease and desist from denying employees who may be held out of service in the application of 28.1 and/or 28.3 of the Collective Agreement and to direct the employer to make whole any employee who has had any such benefits denied during any period they may have been held out of service forthwith, with pre and post judgement interest.
Company Position
The Company asserts that the determination to suspend the ability for an employee to initiate a new benefit claim, during the periods of time when an employee is held out of service pending investigation, or determination of the outcome of an investigation, is a long standing practice.
If the outcome of the investigation results in the continuation of employment, the benefit application is processed, retroactively, on the merits of the entitlement. If the outcome of the investigation results in the termination of employment, the benefit application is denied.
The Company further maintains that an employee held out of service pending investigation, or determination of the outcome of an investigation, is suspended as such, is not active working status at the time of the claim.
The Company disagrees with the Union’s contention and has declined the Union’s grievances.
Ex Parte Statement of Dispute – Union
It has recently come to the attention of the Union that the company has adopted a policy whereby when employees are held out of service pending an investigation as contemplated by Rule 28.1 or the rendering of a decision as contemplated under Rule 28.3 of the Collective Agreement, that the employer reserves the right under some circumstances to deny all applicable negotiated benefits, including Dental Care, Extended Health, Group Term Insurance and Disability Benefit plans for the period the employee is held out of service.
The Union contends that there is no explicit provision in the Agreement that would allow the employer to impose such punitive measures as to deny negotiated benefits. Additionally, the Union contends that this new policy represents an unreasonable exercise of management rights and the company is attempting to gain such right via by forcing the issue to arbitrations which it ought to properly attempt to obtain through the normal bargaining process. Finally, the Union contends that the employer is estopped from applying such a new policy which denies employees access to negotiated benefit plans.
The Union seeks an order that the company cease and desist from denying employees who may be held out of service in the application of 28.1 and/or 28.3 of the Collective Agreement and to direct the employer to make whole any employee who has had any such benefits denied during any period they may have been held out of service forthwith, with pre and post judgement interest.
The Company disagrees with the Union’s contention and has declined the Union’s grievances.
AWARD OF THE ARBITRATOR
Positions of the Parties
The Union takes the position that the Company is in violation of the Collective Agreement to withhold negotiated benefits during pre and post investigative periods in situations where employees are held out of service. The Union also argues that the language in the benefit plan documents does not, unlike other plans dealing with this issue, indicate that benefits cease when an employee is “suspended”. In fact, the Union points out that the term “suspension” or “suspended” is not used anywhere in the benefit plan documents. Finally, the Union argues that if the employer is entitled by way of the Collective Agreement to suspend benefits, that it is estopped from doing so. The Union asks that the Company rescind its practice conveyed to the Union by email on December 6, 2011.
The Company argues that it is a long established management right to suspend wages or benefits of an employee when that employee is held from service pending investigation. The Company submits that the process is in line with Rule 28.1 of the Collective Agreement and that a suspension from active service involves a delay in the benefit to employees and would not result in a termination of benefits, unless the employee is terminated as an employee. The Company asks that the Arbitrator uphold its practice as conveyed to the Union by email on December 6, 2011.
Rule 28
Rules 28.1, 28.2, 28.3 and 25.5 of the Collective Agreement read as follows:
Rule 28 – Investigations and Grievance Procedures
28.1 No employee shall be disciplined or discharged until he/she has had a fair and impartial investigation and his/her responsibility established. An employee may be held out of service pending investigation up to five working day, which can be extended by agreement with the Regional Union Representative. Employees shall not be held out of service unnecessarily.
28.2 Except as otherwise provided in this rule, when an investigation is to be held, the employee and his/her duly authorized union representative will be given at least two days notice of the investigation and will be notified of the time, place and subject matter of such investigation. The notice will be in writing, when practicable. This shall not be construed to mean that the proper officer of the Company, who may be on the ground when the cause for such investigation occurs, shall be prevented from holding an immediate investigation.
When employees are required to make statements on matters affecting the Agreement, Company working rules or compensation, a duly authorized representative of the employee shall be present.
All known existing evidence to be used in the investigation shall be furnished to the employee at the commencement of the statement.
Copies of statements, stenographic reports and all other evidence taken shall be furnished to the employee and, if present, to his/her authorized representative.
28.3 An employee will not be held out of service unnecessarily pending the rendering of a decision. The decision will be rendered as soon as possible but not later than 28 calendar days from the date the report of the investigation is referred to the officer(s) designated in the grievance procedure unless otherwise mutually agreed.
…
28.5 If it is found that an employee has been unjustly suspended or discharged such employee shall be reinstated with full pay for all time lost. In the event of an employee being otherwise employed pending settlement of his/her case by reinstatement any pay earned will be credited against time lost….
December 6, 2011 Email
The Company outlined its position relating to withholding benefits while an employee is held out of service pursuant to Rule 28 by way of an email on December 6, 2011. That email reads as follows:
As discussed this morning, below is a synopsis of the Company’s revised policy with respect to employee entitlement to benefits when withheld from service following our review of CROA 4040. We believe that this is in keeping with the direction given by Arbitrator Picher in this award. Please review and advise with respect to the arbitration date scheduled in February to possibly hear a Union policy grievance.
…
While we are taking direction from this Award our HOS policy has not changed. That is we will continue to HOS an employee when:
(1) There is a concern about employee safety
(2) There is a need to expedite the investigation
(3) The incident is dismissible of itself
(4) The incident, coupled with the employee’s existing discipline, places the continued employment in doubt. Should it be determined that the likely discipline assessed will not result in the termination of the employees employment, the employee will be eligible to receive benefits following the timeframe allowed by the Collective Agreement to withhold an employee from service.
If dismissal is a possible disciplinary response, we will continue to deny benefits while the employee continues to be withheld from service. If following the completion of the investigation there is a determination to not terminate the employee, then benefits should be retroactively approved, provided benefit entitlement is approved by Manulife. If the decision to deny benefits would naturally remain in place, unless otherwise ordered by an Arbitrator’s award, where he stated: “Now, it must be noted that the Company could not suspend the grievor for more than three days pending investigation, and it never imposed an additional suspension as disciplinary penalty, having limited itself to 45 demerits.” In situations where an employee is AWOL, benefits will continue to be declined.
DECISION
With respect, I cannot share the viewpoint of either party in this matter. It is my opinion that the parties must be mindful of the language in the Collective Agreement as well as human rights principles in considering this policy matter.
I disagree with the Union’s position that because the benefit plan documents do not specifically use the words “suspend” or “suspension”, the Company is automatically precluded from withholding benefits, no matter what the circumstance. It is my opinion, that if an employee is not engaged in active service or is on a leave of absence, which may include an unpaid leave for the purposes of investigating an employment matter, the employer may have the right to withhold certain benefits and that a careful read of the Collective Agreement, the plan documents and the specific benefits in question is necessary in each circumstance. It would seem that “being held out of service” pursuant to Rule 28 is captured by the language of certain clauses in the plan documents presented in the course of the hearing. Lastly, the Union did not spend much time in argument discussing its assertion that the Company is estopped from continuing the practice of withholding benefits, nor did it provide any case law supporting its estoppel argument. I do not find the estoppel argument compelling and therefore reject it in these circumstances.
I also take issue with the Company’s assertion that it has a blanket management right to withhold all employee benefits until an investigation is complete. The Company takes the position that it would be automatic for the Union to extend the timeline in Rule 28.1 if an employee was too sick or disabled to conduct an investigation and in such circumstances, it would also be automatic for the Company to continue the withholding of all benefits. As such, an employee who is legitimately sick or ill would be disentitled to critical benefits until such time as they have recovered. To allow the Company to indefinitely suspend benefits, especially when an employee is legitimately ill or disabled, appears on the surface incompatible with the principles espoused in the Canadian Human Rights Act. It further is a position that is at odds with the language negotiated between these two parties.
I consider it critical to this dispute that Rule 28.1 imposes a five working day limit to holding an employee out of service pending investigation. If the Company requires a longer period of time to investigate any employee matter, it can only extend such a suspension with the agreement of the Regional Union Representative. In discussing any such extension, I would assume that continued withholding of certain employee benefits would be an important issue to be discussed between the parties.
As such, I find that in principle, the Company can withhold benefits to an employee for the period of time contemplated in Rule 28.1, depending on whether the Collective Agreement and/or benefit plan documents speak to the fact that the benefits in question cease if the employee is not engaged in active service, or similar such wording.
I agree with the Company that these issues will have to be tackled on a case-by-case basis and the Collective Agreement and benefit plan language must be considered in context. If the Company is unable to complete the investigation within five working days, it is incumbent on the parties to negotiate an extension and discuss whether an employee’s benefits would continue to be withheld during the mutually agreed period of extension. There very well may be circumstances where it makes sense for the parties to agree to extend the investigation period contemplated in Rule 28.1 and also extend the period that benefits are withheld. That said, if there is not express agreement to withhold benefits for a period longer than five working days, I find that it would be improper for the Company to continue to withhold employee benefits to an individual who is otherwise entitled to receive such benefits.
It is so awarded.
Dated at the City of Vancouver in the Province of British Columbia this 5th day of June, 2012.
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