Government cannot unilaterally alter post-retirement benefits
Arbitrator: Government cannot unilaterally cut benefits provided to retired lawyers
An arbitrator has rejected the provincial Government’s attempt to unilaterally cut post-retirement benefits for lawyers who retired from the public service.
Ontario Government employees with at least 10 years of service are entitled, upon their retirement, to the same health and dental benefits as active employees. The Government pays 100% of the cost of those benefits, which have been effected through orders-in-council.
In 2014, the Government announced that, effective January 1, 2017, the service threshold for eligibility for post-retirement benefits will be increased from 10 years to 20 years, and that eligible employees who retire after that date will be required to pay 50% of the cost of the benefits.
The Association of Law Officers of the Crown (ALOC) and the Ontario Crown Attorneys Association (OCAA) grieved the announced changes, relying on article 17.1 of their collective agreement, which provides:
Subject to the agreement of the parties and the terms of this Collective Agreement, the parties agree that, while the terms and conditions of this Collective Agreement are in effect, no existing specifically provided and continuing benefit will be reduced on any issue within the jurisdiction of an arbitration panel.
The Associations maintained that article 17.1 required all benefits, including post-retirement benefits, to be maintained during the life of the collective agreement. The fact that retiree benefits had not previously been negotiated and had been provided by orders-in-council was irrelevant, they said. If the employer wanted to change retiree benefits, it was required to do so in negotiations. In this regard, the Associations maintained that the Framework Agreement, which governs the parties’ collective bargaining, allowed the question of post-retirement benefits to be negotiated and referred to interest arbitration.
The Government argued that the arbitrator had no jurisdiction to hear the grievance because the collective agreement did not cover retired lawyers. It also argued that retiree benefits were not provided in the collective agreement and fell outside the scope of article 17.1. The Government also contended that post-retirement benefits were not a matter that the parties could negotiate or refer to interest arbitration under the Framework Agreement. Rather, post-retirement benefits were a matter for it to determine unilaterally.
The arbitrator’s decision
Arbitrator Kevin Burkett decided in the Associations’ favour.
Turning first to the question of his jurisdiction to hear the grievance, the arbitrator held that “retiree benefits are part of the compensation package for active employees and, as such, may be bargained.” He concluded that the “essential character” of the dispute arose from the collective agreement since:
- retiree benefits are a proper subject matter for collective bargaining
- retired former members of the bargaining unit had enjoyed retiree benefits for many years
- those benefits were specifically identified in the benefits booklet provided to active employees
- article 17.1 preserved benefits for the duration of the collective agreement, and
- the issue to be decided was whether the term “benefit” in article 17.1 included retiree benefits
The arbitrator then considered the question of whether retiree benefits fell within the scope of article 17.1. He rejected the employer’s argument that, because post-retirement benefits had never been bargained, there could have been no intention that such benefits would fall within the scope of article 17.1. He noted that when the predecessor version of article 17.1 was first included in the collective agreement in 2000, retired lawyers had long been receiving the same benefits as other retired government employees and continued to do so. Therefore, was no reason, for the Associations to raise the issue in bargaining.
The arbitrator also rejected the employer’s argument that post-retirement benefits were excluded from article 17.1 because they were provided by orders-in-council. The real question, he noted, was whether the parties had agreed under article 17.1 to limit the employer’s discretion to alter or amend those benefits.
In considering the specific language of article 17.1, the arbitrator held that retiree benefits were an “existing, specifically provided and continuing” within the meaning of the article. There was no question that the retiree benefits were “existing” at the time the current collective agreement was negotiated. They were also “specifically provided” under the relevant order-in-council. They were also “continuing” because, at the time the current collective agreement was negotiated, there had been no steps announced or taken to discontinue or alter those benefits.
Finally, the arbitrator held that post-retirement benefits fell within the jurisdiction of an arbitration panel to award, holding that the Framework Agreement did not exclude retiree benefits from the scope of article 17.1. Indeed, he concluded, this meant that retiree benefits were an approved subject matter for collective bargaining. They also fell within those matters that could be referred to an interest arbitration panel.
In the result, the arbitrator held that the Government could not unilaterally alter the post-retirement benefits provided to lawyers. However, he noted that the award did not restrict in any way the Government’s right to raise the issue in the next round of bargaining or put the matter to an interest arbitrator.
Steven Barrett represented ALOC in the arbitration proceedings.