FPSLREB Decisions

REPORT

Introduction

This Conciliation Board was appointed under the provisions of s.79 of the Public Service Staff Relations Act in regard to the negotiations between Treasury Board (the "Employer") and the Public Service Alliance of Canada - Operational Services Group bargaining unit (the "Alliance") in the following circumstances: The Alliance served notice on June 5, 2003 to renew the collective agreement that expired on August 4, 2003. The parties met on their own, and, with the assistance of a Conciliation Officer for twenty-five days in total between September, 2003 and March, 2004. A number of matters remained unresolved and in June, 2004 the Alliance requested that the Chair of the Public Service Staff Relations Board appoint a (this) conciliation board, which occurred on August 4, 2004.

We met with the parties on August 24, 27, 28, 29 and 30, 2004 in order to assist in their efforts to renew the collective agreement. A considerable number of issues were dealt with and some appear to have been resolved, albeit on a without prejudice basis. There are a number of issues which remain outstanding. The content of this report is confined to those issues we believe to be key to the creation of a renewed collective agreement. That is not to say that matters unaddressed are not significant, rather, their resolution may be less difficult to achieve should the parties reach agreement on the crucial elements of their dispute.

Pay (Appendices A through H)

The Operational Services Group is composed of eight occupational classifications: Firefighters (FR), General Labour and Trades (GL), General Services (GS), Heating, Power and Stationary Plant Operations (HP), Hospital Services (HS), Lightkeepers (LI), Ships' Crews (SC), and Printing Operations - Supervisory (PR) (sometimes referred to as "PR(S)"). The composition of and payroll for this bargaining unit as at December, 2002 was as follows:

TABLE 2 COMPOSITION and PAYROLL

DECEMBER 2002

Group	Count	% of Group	Payroll	Mean Salary	Hourly	Hours of Work
FR	417	4%	18,716,095	44,883	20.48	42.0
GL	5,150	48%	203,355,340	39,486	18.92	40.0
GS	2,868	27%	97,814,526	34,105	16.34	40.0
HP	473	4%	18,773,074	39,689	19.02	40.0
HS	416	4%	16,347,334	39,296	20.08	37.5
LI	113	1%	3,933,236	34,807	19.06	35.0
SC	1,323	12%	51,831,462	39,177	18.77	40.0
PR	10	0%	520,421	52,042	26.60	37.5
Total/Avg	10,770	100%	411,291,487	38,189	18.34	39.9

(The Employer data differ slightly from the above Alliance information only in regard to the percentages of employees, but not the actual numbers, in each of the eight groups.) In addition, the number of pay levels in each of these nation-wide groups ranges from five (PR) to fourteen (GL).

In the collective agreement which expired August 4, 2003, the parties, by way of a Letter of Understanding, agreed "to conduct a compensation comparability study", its terms of reference also jointly agreed upon. The terms of reference did not include the requirement for recommendations or for comparative analysis of the data. In July, 2003, the external consulting firm submitted its final study to the parties (herein, the "Pay Study") in which the rates of pay of thirty-one bargaining unit classifications were compared with those of non-federal government employees, also throughout Canada, in those same classifications. While the parties hold different interpretations of the data in the Pay Study, they appear to agree that the rates of pay for the bargaining unit members ought to take into account the "gap" between the current rates of pay for bargaining unit members and the higher rates of pay for non-federal government employees, as revealed by the Pay Study. The Alliance posits that the comparator groups have rates of pay, generally, twenty percent higher than the rates of pay currently provided for in the collective agreement.

The Alliance proposes that bargaining unit members' pay be addressed in a 40-month collective agreement (August 5, 2003-December 31, 2006) as follows:

1. August 5, 2003 - August 4, 2004

   1. Increase FR and HP groups' hourly rates by $2.50.

   2. Increase GL, GS, HS, LI, SC and PR groups' hourly rate by $1.25.

   3. After the above increases have been made, a 3% economic increase for all eight groups.

2. August 5, 2004 - August 4, 2005

   1. Creation of a 3-step pay structure for the GL, GS and HS groups:

      1. The highest pay of the three regional pay zones (normally Zone 1) becomes the Step 2 pay of the 3-Step pay structure at the level of 100% of the highest pay.

      2. Step 1 pay of the 3-Step pay structure is 96% of the Step 2 pay.

      3. Step 3 pay of the 3-Step pay structure is 104% of the Step 2 pay.

      4. GL, GS and HS group employees who are not in the highest pay Zone (normally Zones 2 and 3) move to the nearest Step in the 3-Step pay structure that is higher than their current rate of pay.

      5. All employees (i.e., presumably those in the GL, GS and HS groups), currently in Zone 1 move to Step 3 of the 3-Step pay structure.

   2. 1. Bargaining unit employees in the FR, HP, LI and PR groups to receive a new increment at the top step of each pay grid equal to 4% of the current top step.

      2. All employees at the current top step for twelve months or more move to the new top step immediately.

      3. Drop the current bottom step in each pay grid.

   3. Harmonize the SC sub-groups employees' rates of pay at the highest rate of pay in effect for that level (STD level 1, SPT/EQO levels 2 to 7).

   4. After the implementation of the above changes, a 3% economic increase for all eight groups.

3. August 5, 2005 - August 4, 2006

   1. 1. FR and HP group employees to receive a new increment at the top step of each pay grid equal to 4% of the currently top step.

      2. All employees at the current top step for twelve months or more move to the new top step immediately.

      3. Drop the current bottom step of each pay grid.

   2. After the implementation of the above changes, a 3% economic increase for all eight groups.

4. August 5, 2006 - December 31, 2006

   1. 1.5% economic increase for all employees in all eight groups.

The Employer proposes that bargaining unit members' pay be addressed in a 36-month collective agreement (August 5, 2003-August 4, 2006), as follows:

1. Harmonize the pay structure for the SC group by combining the "Deck and Engine Room" sub-group with the "Steward" sub-group, such that the higher pay of the two pay grids applies to the harmonized pay structure.

2. 1. Harmonize the pay structure for the HS group by combining the HSO and PHS sub-groups in the same manner as for the SC sub-groups above.

   2. (ii) Eliminate the orderly-in-training and cook-in-training classifications (on the ground they are defunct).

3. 1. Maintain the existing three regional pay Zones (Zone 1 - B.C., Yukon, Nunavut, NWT; Zone 2 - Atlantic region, Quebec, Ontario; Zone 3 - Man., Sask., Alta.)

   2. (ii) For the GL and GS groups in all three Zones, provide for a "Market Adjustment Differential" equivalent to 15% of the gap between these employees' current rates of pay and the non-federal government rates of pay for those classifications identified in the Pay Study. (For example, the current rate of pay for the GL/GS group MDO 4 light-truck driver classification is $16.38 per hour. The Pay Study indicates a non-federal government rate of pay for light-truck driver of $20.27 per hour. The gap between the two rates of pay is $3.89 per hour. The 15% Market Adjustment Differential (i.e., 15% of $3.89) is equal to 58.35¢.) For job classifications not addressed in the Pay Study, the Employer suggests the Study data be used to guide development of an equivalent calculation.

   3. The Market Adjustment Differential amount is to be an additional payment to employees but which amount is not to be included in the pay grid.

   4. The GS group standard to be used for the HS group to determine the Market Adjustment Differential amount for these two groups.

   5. For the FR and HP groups, the Market Adjustment Differential is to apply, however, not on the basis of the non-federal government rates of pay in the Pay Study, which reflect the average pay rate on a provincial basis. Rather, the closest comparable municipality or region rate-of-pay is to be used to identify the gap. (For example, the rate of pay for FR group employees in Halifax to be compared with the firefighters' rates of pay in Halifax and/or surrounding municipalities/regions and not to be compared with the average rate of pay in Nova Scotia.)

   6. Market Adjustment Differential effective August 5, 2003.

4. 1. August 5, 2003 - August 4, 2004 - 2.25% economic increase

   2. August 5, 2004 - August 4, 2005 - 1.75% economic increase

   3. August 5, 2005 - August 4, 2006 - 1.75% economic increase

There are major differences between the parties' pay proposals. Firstly, the Alliance economic increase is higher than the Employer's in each of the three years and includes an additional increase, 1.5% effective August 5, 2006, by way of a longer term collective agreement than the Employer proposes. Secondly, the Employer strongly proposes the continuation of the 3-Zone system and the Alliance proposes the elimination of the current Zonal system in favour of a single 3-Step pay structure. Thirdly, while both parties suggest that adjustments be made to rates of pay in order to respond, somewhat, to the differences identified in the Pay Study, they do so in significantly different ways and with different approaches to the eight groups. Fourthly, the Alliance proposes a greater closing of the Pay Study gap than does the Employer.

Recommendations

The information submitted to us appears to suggest a trend towards an annual increase of 2.5% in the first year (2003) of 3-year collective agreements in the federal public sector. The information also indicates a trend towards increases of at least 2% in each of the second and third years, with 2.5% as the dominant trend in the second year. There is no information before us to suggest there exists unique circumstances that apply in the case of this bargaining unit which militate against pay increases in line with the trends. Indeed, even a cursory analysis of the Pay Study data indicates that the pay for most (some 75%) of the thirty-one job classifications of this bargaining unit are notably below the average wage rate outside the federal public sector, i.e., at least 10% below average. Further, the parties agree that in addition to percentage increases in pay, certain pay adjustments must also be made in order for there to exist reasonable and acceptable comparisons between the pay for this bargaining unit's members and for those outside the federal sector. We are unable, however, to comment on the efficacy of the parties' respective pay adjustment proposals because they were first presented during conciliation and need to be fully and extensively discussed by the parties in order to establish contours of agreement and disagreement on the merits of their divergent proposals.

In light of the above and in recognition of the parties' agreement that adjustments to pay rates will have to be made, we recommend pay increases as follows:

To be clear, the above pay rate increases are premised on the parties' agreement to close the gap between the bargaining unit rates of pay and those outside the federal public service, and, on the basis that they have yet to reach agreement on the extent to which the gap will be closed in this round of negotiations. In that respect, the Alliance proposal regarding "catch up" tends more towards reasonableness than does the Employer's current proposal.

As concerns the difference between the parties over term of the agreement, the data indicate a trend towards 36 months. Should the parties extend theirs beyond three years, we recommend a pay increase effective August 5, 2006, but make no specific recommendation as to its amount in the absence of comparative data.

Shift and Weekend Premiums (Art. 27), Overtime (Art. 29) and Various Allowances

The Employer has yet to provide specific counter-proposals to those of the Alliance in regard to the above items. (However, it does propose a change to the definition of "Overtime" in art. 2.01 (q) (ii) in regard to a requirement for part-time employees to work on overtime "in the same position" as a full-time employee in order to qualify for that pay rate.) The dispute between the parties is further exacerbated by way of two Alliance initiatives. Firstly, the Alliance proposes to expand existing allowances to other (and some cases, all) groups which generally are currently only available to certain groups (e.g., the Dangerous Goods Allowance is only available to the GS group). Secondly, the Alliance proposes the addition of a new article in the collective agreement, "Specialized Response Allowance", that would include the existing Rescue Specialist and the Nuclear Emergency Response allowances, and, the following new allowances: HAZMAT Response, Urban Rescue, Emergency Medical Response, Biochemical Firefighting Response, and, Emergency Medical Dispatch. The Employer is in favour of neither initiative.

The salients of the Alliance rationale for its position are as follows: The job classifications are outdated and do not adequately reflect the current work of bargaining unit members. The sorts of tasks associated with the new types of allowances did not exist or were not as regulated as they currently are when many of the job classifications were developed. Bargaining unit members have been required to undergo training and obtain certification in order to perform the work associated with the new allowances. Bargaining unit members who are trained and certified have performed the work associated with the new allowances without receiving an allowance, while other bargaining unit members working alongside them are receiving the allowance.

The Employer is of the view that the employees who perform the work associated with the new allowances already receive compensation for that work by way of their job classification. Further, those who are trained, certified and performing work associated with the current allowances do, in fact, receive the allowance. Thirdly, if a trained and certified employee does not perform the work in issue, or rarely performs it, neither circumstance warrants a monthly allowance.

Recommendations

The entire debate over entitlement to the above allowances is highly susceptible to resolution if the parties agree to the following principle, to wit: Where the Employer requires an employee to be trained and certified in order to perform the work associated with any of the above allowances, the employee is to receive that allowance. We so recommend.

Secondly, we recommend that the Employer table its position regarding the amounts associated with all the allowances addressed by the Alliance in its proposals.

Conversion of "Days" to "Hours" in the collective agreement provisions, including appendices.

The Employer proposes that Article 25 - Hours of Work, include a definition for " shift schedule" and a definition for "shift" whereby a shift schedule means "the arrangement of shifts over a given period of time and includes days of rest and designated paid holidays", and shift means:

the rotation through two (2) or more periods of eight (8) hours or longer where the Employer requires coverage of sixteen (16) hours or more each day; or, where the Employer requires the employee to work on a non-rotating and indefinite basis on evening or night duty of which half or more hours are scheduled between 1800 hours and 0600 hours.

In light of the above definitions, the Employer proposes that throughout the collective agreement and appendices (and their annexes where applicable) all references to "days" that apply to work schedules and leaves with pay (and without pay re: Art. 52 provisions) be changed to "hours". For example, for an employee who works eight hours a day, the word "day" would be replaced by "8.0 hours" and for an employee on a 37½ hour weekly work schedule, reference in the agreement to "day" would change to "7.5 hours". The conversion of the term "day" to match an employee's scheduled hours of work in an above-defined " shift schedule"composed of "shift(s)", is viewed by the Employer as useful, among other things, for purposes of clarifying when an employee is entitled to overtime wages and when he or she is not entitled to overtime wages. There is, however, another effect which the Alliance views as being adverse to the employees. An example best serves to illustrate the Alliances's concerns.

Article 42 - Leave With Pay for Family-Related Responsibilities, provides for, at art. 42.02: "The total leave with pay which may be granted under this Article shall not exceed five (5) days in a fiscal year." Employee A work 8 hours a day for five days a week, and, Employee B works 40 hours a week on a compressed work schedule consisting of four 10-hour shifts. Each, therefore, can draw on 40 hours of leave with pay for family-related responsibilities. Under the Employer's proposal, when Employee A takes a day off work for this purpose, her bank is reduced by 8 hours and she is left with the opportunity to take 4 more days off. However, when Employee B takes a day off work, her bank is reduced by 10 hours and, thus, has only opportunity to take 3 more days off, yet, under the current provisions, both employees are entitled to take 5 days off work, i.e., five shifts of work. The Alliance views this result of the Employer's proposal to be unfair. The Employer points out, however, that Employee B already has three days off per week compared to two days off per week for Employee A.

Recommendations

The change from "days" to "hours" throughout the collective agreement which the Employer seeks would be significantly less controversial if the bargaining unit was not as diverse as it is, in terms of both the eight disparate job groups and the multiplicity of work schedules and work shifts. In this respect, there are different notions of a "work day" in the collective agreement concerning the eight groups. For example, a firefighter's "daily rate of pay" is defined as "an employee's annual rate of pay divided by the number of working days on his or her annual work schedule", while this definition for a member of the GL sub-group is, "an employee's hourly rate of pay times his normal number of hours of work per day." As concerns work shifts and work schedules, harken back to the above example involving two employees, one on an 8-hour per day, 5 days a week work schedule, the other on a 10-hour per day, 4 days a week work schedule. The controversy arises only if a personal-leave-with-pay "day" is defined as 8.0 hours for all eight groups irrespective of the differences that currently exist among them in terms of shift length and work schedule, and, on the view that the purpose behind the provision is to provide employees with 40 hours of paid leave rather than 5 work shifts of paid leave. In short, if the Employer is to be successful in achieving its objective, it must demonstrate to the Alliance, to a greater degree than it has up to now, how each of the specific purposes now served by the use of "day" will be affected by the change to "hours". Where the change is inconsequential, the parties should be able to reach agreement. Where the change does have adverse consequence, those areas can then be subject-matter for negotiations.

We make no specific recommendation.

Marriage Leave With Pay (Art. 44)/Definition of "Spouse" (Art. 2.01)

The Alliance proposes that art. 44 and art. 2.01 be amended such that these provisions allow employees with a same sex "common-law partner", and who are in locations "where same-sex marriage is not available", to have their "participat[ion] in a public commitment ceremony" recognized for purposes of entitlement to five days leave with pay under the Marriage Leave With Pay provision. This leave cannot now be used by same-sex partners without the proposed changes. The Alliance submits that the above changes reform the language of Article 44, such reform necessitated by the May 26, 2003 decision of the Canadian Human Rights Tribunal which found the current language to lead to a discriminatory practice, whereby employees in a same-sex relationship "were forced to take annual leave in order to celebrate their spousal union" (p.36 of the Alliance Submissions).

The Employer proposes to conform with the order of the Tribunal at para. I (2), i.e., ". . . take such steps as are necessary to eliminate the discriminatory practice in the application of [Article 44]", by deleting Article 44 in its entirety and adding the following provision to Article 35 - Vacation Leave With Pay:

The employee shall be credited twenty-two decimal five (22.5) hours of vacation leave with pay on the first day of the month following the day on which the anniversary of the employee's second year of service, as [sic] determined pursuant to clause 35.03(a).

We make no recommendation However, we advise the parties not to let this matter grow out of proportion and become an impediment to a tentative collective agreement.

Ships' Crews (Appendix G)

The Employer and the Alliance both propose a number of changes to provisions specific to the Ships Crews' group. The apparently most controversial of them relate to the current "Lay-Day Work System" (There is more than one work system for the SC group). Briefly, and at the risk of over-simplification, ships' crews work for 28 consecutive days, followed by 28 days when they do not work. During an annual cycle, a ship is not on the water for "refit" and "out of service" periods, both of which generally correspond with the 28-day cycle. In order for ships' crews on the lay-day system to maintain their annual income, days at work generate lay-days at the rate of 1.17 lay days for each day of work. However, in the case of a ship on a "10-2-1" operating cycle (i.e., 10 months in the water, 2 months out-of-service, 1 month refit), one work day generates 1.36 lay-days. (The number of ships on the 10-2-1 system has been greatly reduced, to approximately 5, and which number is not necessarily expected to remain static).

The Employer proposes replacing the Lay-Day Work System with a new "Rotational Work System". For its part, the Alliance favours the continuation of the Lay-Day System and proposes changes to current provisions so as to, essentially, ensure that employees on it generate sufficient numbers of lay-days in order to maintain their annual income. This latter proposal is based on its concern that the Employer is making, or may make, changes to the amount of time certain ships, presumably those on the 10-2-1 schedule, are in the water, such that their crews will not work enough days in order to generate a sufficient number of lay-days. For its part, the Employer points out that the number of ships on the 10-2-1 schedule has dramatically reduced and may continue to be reduced and, secondly, that it is planning to have ships in the water for greater lengths of time than in the past.

Recommendations

The difficulty with the parties' debate on the Lay-Day/10-2-1 issue is that their positions appear asymmetrical and unresponsive to each other's concerns. In any event, a continued reduction in the number of ships on the 10-2-1 system will, of itself, resolve the controversy.

Given the state of the negotiations between the parties, we recommend that the Employer withdraw its proposal.

Conclusion

This report only deals with key issues common to all eight groups in the bargaining unit. There are significant group-specific issues that will have to be resolved in order to achieve a tentative collective agreement. For example, in addressing items specific to the firefighter group, the Employer ought to consider whether or not it wishes to continue to train firefighters at no cost to other employers, given the Alliance data concerning retention rates in the first few years after the initial period of employment. For another, since Ships' Officers are now entitled to a Nuclear Emergency Response allowance, it would seem reasonable that other employees on the same ships, i.e., Ships' Crews, be entitled to that allowance.

We thank the parties for their able and comprehensive presentations. We believe they are capable of resolving their differences. A complete appraisal of their current positions in light of where they are in the negotiations process and a commitment on their part to fully explore the matters remaining in dispute will greatly assist their endeavours to achieve a tentative collective agreement.

Dated at Toronto, this 7th day of September, 2004.

Original signed by
William A. Marcotte
Chair

Original signed by
S. Budd Employer Nominee
Partial dissent and comments

Original signed by
J. Wolfgang Alliance Nominee
Partial dissent and comments

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While I do not agree with the recommendation of the 2.5% economic increase in the second year of a three-year agreement, I am basically in agreement with the report, although I have two distinct areas of comment.

Economic Increases

I agree with the recommended economic increases for the first and third years of a three- year agreement. I do not agree with and economic increase of 2.5% in the second year.

As stated in the report the trend for 2004 (the second year of a three-year agreement) is between 2% and 2.5%. The trend for negotiated settlements in PSSRA Federal Public Service clearly leans to 2%.

Based on the above I recommend an economic increase on August 5,2004 (second year) of 2%.

Definition of a Shift and Shift Premium

The Employer's proposals to include a definition of a shift and those on shift premium are distinct from the issue of the value of a day and have nothing to do with entitlement to overtime pay. They are directly linked and are proposed to ensure that an employee who is a day worker is not entitled to a shift premium.

Conversion of Days to Hours

The Employers proposals through out the agreement to convert days to hours is to ensure that employees working the same number of hours and receiving the same pay over a specified period are entitled to exactly the same number of hours of paid leave.

I would like to thank the parties for their presentations and co-operation during the conciliation process.

Sandra H. K Budd
Employer Nominee

Date: September 7, 2004

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September 7, 2004

DISSENT TO THE CONCILIATION BOARD REPORT FOR THE OPERATIONAL SERVICES GROUP (TABLE 2)
TREASURY BOARD and the PUBLIC SERVICE ALLIANCE OF CANADA

GENERAL COMMENTS

The decision of the Board covers the history of this bargaining unit and the events leading up to this report and need not be repeated here. There were a large number of issues referred to the Conciliation Board. I would like to thank the parties for their assistance and expertise in the mediation stage of the process. However, little progress was made in the Conciliation stage and a considerable number of outstanding items remained for the Conciliation Board to report on.

Having received the report of the Conciliation Board as written by the Chairperson, I find myself in the position of having to dissent from the report almost in its entirety. There are in fact only three recommendations of substance, and I must express significant difficulty with each. However, my concern is not only with the recommendations made, but with the fact so few recommendations are made. I therefore find myself not only having to dissent, but to do so at length.

Despite the fact this board worked hard to try and understand the outstanding issues placed before it by the parties, it is my view that the report fails to assist the parties in reaching an agreement. In so doing it misses the entire purpose of the exercise, as set out in the Public Service Staff Relations Act. Section 76 of the Act reads:

When the parties to collective bargaining have bargained in good faith with a view to concluding a collective agreement but have been unable to reach agreement on any term or condition of employment of employees in the relevant bargaining unit that may be embodied in a collective agreement, either party may, by notice in writing to the Chairperson, request conciliation of the dispute.

Section 77(3) of the Act states in part:

.the Chairperson [of the PSSRB] may establish a conciliation board for the investigation and conciliation of a dispute where it appears to the Chairperson that the establishment of such a board may serve the purpose of assisting the parties in reaching agreement, and that without the establishment of such a board the parties are unlikely to reach agreement.

Finally, section 85 (1) of the Public Service Staff Relations Act which reads:

A conciliation board shall, as soon as possible after the receipt by it of the statement referred to in section 84, endeavor to bring about agreement between the parties in relation to the matters set out in the statement [the terms of reference].

In sum, the provisions of the Act provide for the establishment of Conciliation Board in order to assist the parties in reaching an agreement, where they have otherwise been unable to do so, and the report of the Board should point towards the settlement, both in terms of an overall framework for an agreement, and in terms of specific recommendations to assist the parties.

Having served on a large number of conciliation boards under the PSSRA over the last number of years, I am afraid I have rarely seen a report which provides such limited direction to assist the parties in reaching a negotiated settlement. The report creates the illusion of being a report of substance, but the lack of useful recommendations on what are key issues essentially makes it a "no-board" report, and in the circumstances such an outcome might have been more appropriate.

I will comment in more detail below on the specific recommendations, but there are only three specific recommendations:

• A recommendation for an general economic increase which can only be viewed as a "lowball" recommendation inconsistent with current trends and settlements

• A vague recommendation on allowances suggesting the parties need to incorporate a general principle and then discuss more.

• A recommendation that the Employer withdraw its proposal on lay-days.

No other specific recommendations are made. The report falls particularly short of requirements by failing to address the extensive results of the operational services compensation study (a.k.a. the "Table 2 Pay Study"), and the issue of national rates of pay. These were clearly the key items blocking agreement on the part of the PSAC. There were several other outstanding issues which it would have been easy to address in a report, as a way of framing the means for a possible settlement. The report also fails to make a recommendation on the "day-is-a-day" issue, which was a key item being put on the table by the Employer.

Because of this I feel obligated, as the union nominee, to comment in much more detail than I would normally. I will do so in sections.

GROUP SPECIFIC ISSUES

The first area I will comment on, where the Conciliation Board has failed to exercise its responsibilities appropriately, rests with the absence of recommendations on issues placed before it in respect to specific occupational groups.

The Operational Services bargaining unit encompasses employees located in eight distinct occupational classifications: Firefighters (FR), General Labour and Trades (GL), General Services (GS), Heating, Power and Stationary Plant Operations (HP), Hospital Services (HS), Lightkeepers (LI), Ships' Crews (SC), and Printing Operations - Supervisory (PR). These classifications have been grouped together for the purpose of collective bargaining.

The construction of the bargaining unit was intended to reflect a community of interest among the different groups but equally, if not more, important - to forge the basis for a more effective and efficient approach to collective bargaining. In the past, negotiations had been conducted separately for each of the eight classifications. That model proved to be particularly cumbersome, presenting significant operational challenges for both parties.

Collapsing eight occupational groups into a single bargaining unit is only sustainable to the extent that members of the respective groups maintain confidence that their group-specific concerns are addressed in a combined format. Where the bargaining process does not operate to permit those concerns to be properly resolved, pressures to disassemble the Table structure will surely follow - with all the expected consequences.

An example of this point can be found in the recent arbitration between the Employer and the Canadian Merchant Service Guild on behalf of the Ships Officers (SO) unit. The small bargaining unit, exclusively comprising SO employees, was able to achieve the Nuclear Emergency Response (NERT) allowance for its members yet this Board fails to make a concrete recommendation to extend the same allowance to SC employees working alongside the Ships Officers. This Board's treatment of that issue is unreasonable and of great detriment to the bargaining structure to which the parties are committed. I realize the Board made a point of stating if the employee was trained, and certified in order to perform the work associated with the allowance they should be paid the allowance. This could have been used as a specific example to drive that point home.

It should be very important for this Board to attend to the distinct and legitimate concerns raised on behalf of certain group-specific employees undermines the bargaining structure. Dismissing the concerns of the FR, LI, or SC employees simply due to their relatively small numbers encourages those employees and their representatives to question the value and efficacy of their ongoing attachment to the Operational Services unit.

I am disappointed that the Board has failed to address the proposals advanced on behalf of three specific groups, namely the FR, LI, and SC groups.

FR issues:

The union had proposed two minor amendments in order to address specific areas of ambiguity in relation to the application of the hours of work and overtime provisions. Their proposal seeking to insert into the FR group-specific appendix, a definition of what constitutes a "day" responds to the fact that the FR group is the only group covered by the Operational Services contract that lacks such a definition. It is irrational to allow an identified omission to continue to operate where it has been demonstrated to produce confusion. Managers and employees require the clarification that the contract should rightfully provide in order to guide them in its interpretation. The union has proposed a definition of a day that appears in Annex "C" of the SC Appendix since that language applies to another group of employees operating under an equivalent 42-hour averaging system. A positive recommendation in this area would also have resolved the second FR-specific item dealing with an irregularity in overtime compensation that has developed as a consequence of the confusion surrounding the definition of a day. A second positive recommendation would be to remove from Article 27 the exclusion of FRs from the shift and weekend premium. When a group is so far behind the "market" they rely on whatever means to improve their pay.

SC Issues:

The Conciliation Board report states, in part:

The Employer proposes replacing the Lay-Day Work System with a new "Rotational Work System". For its part, the Alliance favours the continuation of the Lay-Day System and proposes changes to current provisions so as to, essentially, ensure that employees on it generate sufficient numbers of lay-days in order to maintain their annual income. This latter proposal is based on its concern that the Employer is making, or may make, changes to the amount of time certain ships, presumably those on the 10-2-1 schedule, are in the water, such that their crews will not work enough days in order to generate a sufficient number of lay-days. For its part, the Employer points out that the number of ships on the 10-2-1 schedule has dramatically reduced and may continue to be reduced and, secondly, that it is planning to have ships in the water for greater lengths of time than in the past.

Recommendations

The difficulty with the parties' debate on the Lay-Day/10-2-1 issue is that their positions appear asymmetrical and unresponsive to each other's concerns. In any event, a continued reduction in the number of ships on the 10-2-1 system will, of itself, resolve the controversy. Given the state of the negotiations between the parties, we recommend that the Employer withdraw its proposal.

The Lay Day factor was increased in the last agreement to 1.36 from 1.17 to ensure the crews on the 10-2-1 schedule would receive a full years pay. My understanding is that if the schedule is less than 10-2-1 the Employer has only been applying the lower1.17 Lay Day factor. This does not allow enough time to be credited to ensure a full years pay without using other leave to top up their pay. Even then employees may not have other forms of leave sufficient to make up the difference.

The union's position is that employees should not be required to take other forms of leave to make up a full years pay. This is a very reasonable position and, in fact, mirrors the unanimous conciliation board recommendation from the previous round of bargaining: "We recommend that the lay day factor be amended to ensure that employees are not required to use personnel leave (i.e. annual vacation) to ensure a full year of wages".

The treatment of the SC lay-day scheduling system is most confounding given that the Board should clearly understand that recent changes to the scheduling of vessels is having the effect of failing to provide indeterminate SC employees with sufficient time worked to generate their annual income. This is not a minor issue to those employees or the families for which they provide. To recommend only that the Employer withdraw its proposal to introduce a new, ill-conceived rotational system does not address the primary issue placed before the Board nor does it serve to assist the parties in reaching agreement.

The Alliance also raised two other concerns related to SC working conditions (access and payment for telephone calls; conventional work schedules) that the Board has chosen to ignore in the report. Again, these are operational issues that have not been addressed by the Employer and for that reason have been placed before the Board. In order for a consolidated bargaining structure to function properly the Board should have directed some effort and attention to these group-specific issues.

Another positive recommendation would be to remove from Article 27 the exclusion of SCs from the shift and weekend premium.

LI issues:

The union had proposed increases to the allowances that Lightkeepers currently receive inrecognition of the challenges of their role and the isolated locations in which they perform their work. The LI groups is a very small (n=113), lower-wage segment of the bargaining unit and the cost associated with increases are negligible to the Employer. Increases to the supplementary allowance and the meteorological allowance are typically negotiated in each round of bargaining. The food allowance for rotational stations was introduced in the last round of collective bargaining in recognition that the LI employees working on rotational cycles were required to purchase food in effect for two households. The unanticipated taxing of the Food Allowance has reduced its expected value, and that purchasing power should be restored. The union proposals, while modest, would have made a difference to these employees. The Board's failure to address these proposals in its report deprives this small group of employees of an appropriate and deserved adjustment.

ALLOWANCES

The Alliance proposal on the issue of allowances can be divided into two categories. The first category calls for the expansion of certain allowances, which currently apply to select groups of employees, to the balance of the bargaining unit. This applies to allowances dealing with the Transportation of Dangerous Goods, Dirty Work Allowance, Height Pay, and Specialized Response although certain elements of the last one are new. The second category of allowances calls for an increase in the amount of an existing allowance; this applies to their proposals with respect to the Penological Factor Allowance and the Diving Allowance.

In both cases the proposals are generated at least partly out of the inability of employees to receive proper compensation for the assumption of additional duties via the classification system. As the Board heard, most employees operate under job descriptions and/or classification standards that have not been amended since the late 1960's. The failure of the classification process to acknowledge the value of these additional functions and responsibilities has caused employees to seek correction through collective bargaining.

On the first category of proposals, the concept is straightforward - if one group of employees is required to undergo training, obtain certification, and perform duties equivalent to the group receiving a given allowance then the allowance should be extended to others subject to the same requirements. In regards to this set of proposals the Conciliation Board report states:

The entire debate over entitlement to the above allowances is highly susceptible to resolution if the parties agree to the following principle, to wit: Where the Employer requires an employee to be trained and certified in order to perform the work associated with any of the above allowances, the employee is to receive that allowance. We so recommend. Secondly, we recommend that the Employer table its position regarding the amounts associated with all the allowances addressed by the Alliance in its proposals.

While I can support the recommendation to expand the allowances, the second recommendation is not helpful. The Employer has had ample opportunity to present its views on allowances and indeed it has. It is opposed. Given that position, the Board report ought to have specified the amounts deemed appropriate. In each case the Alliance has stated its position on the value of the respective allowance and thus the Board was possessed of knowledge of the parties' respective position sufficient to make a recommendation.

On the second category of allowances, the union proposed an increase to the amounts paid because it believes the amounts are inadequate in relation to the tasks. In regards to the Diving Allowance applicable to GL employees, the Board received information that the Operational Services amount is $10 below the amount recently agreed to at Parks Canada for a comparable workforce. Given this precedent, a Board recommendation to match the Parks figure should have been forthcoming. The Diving Allowance for the SC employees operates differently and is paid on an annual basis. Information submitted to the Board in the Alliance brief and during the hearing period clearly outlines the enhanced role performed by Coast Guard divers. The potentionally dangerous activities now expected to be performed by this group, in my opinion, certainly warrant a substantial increase.

In regards to the PFA, both parties indicated an interest in modifying the structure of the allowance and in increasing the amounts to be paid. Once again, ample information was placed before the Board. In order to assist the parties in reaching an agreement, the Conciliation Board ought to have identified the amount of an adjustment it deemed reasonable. Remaining silent on the issue serves no valid purpose.

OTHER ISSUES

Maternity and Parental Leave

On this issue it was reported to us that language has been signed off between the PSAC and the Parks Canada Agency and PSAC and the Office of the Auditor General. The basis of the agreements reached for those units is to change the repayment provisions such that term employees do not have to repay their maternity or parental leave allowances if they are rehired within 3 months. The current is five days, and for this unit the PSAC had been proposing six months. Employees who move employers within the PSSRA Schedule 1 are also exempted from the repayment. Parental leave language was also altered to allow the leave to be taken within 104 weeks of birth if a child is hospitalized, in line with current EI legislation. I think a recommendation in line with the agreement reached for Parks and OAG could have helped the parties reach a settlement on this outstanding issue.

Marriage Leave and definition of spouse

On the issue of marriage leave, I have to register my objection to the position adopted by the Board chairperson. The conciliation board report states:

We make no recommendation. However, we advise the parties not to let this matter grow out of proportion and become an impediment to a tentative collective agreement.

Obviously the treatment of Marriage Leave does stand as an impediment to a collective agreement; the parties were not able to resolve the issue during negotiations, in discussions with a conciliation officer, or through the mediation efforts of this Board. To once again abrogate the Board's responsibility by declining to weigh in on an issue provides no assistance to the parties whatsoever.

I recommend that the union's proposal on Marriage Leave be adopted. Their proposal removes a discriminatory practice found in the Marriage Leave provisions of the collective agreement by extending an equivalent entitlement to employees participating in same-sex commitment ceremonies. It is a position entirely consistent with an order from a 2003 Canadian Human Rights Tribunal and the Employer's own administrative practice developed in response to the Tribunal order. Given that equivalent language has recently been agreed to by the PSAC at the OAG, CCRA, and is recommended by the Conciliation Board report for Parks Canada, sufficient precedent exists for recommending it in this instance. I also recommend the Alliance position amending the definition of "spouse" in Article 2, Definitions. This is simply a consequential change associated with the union's position on Marriage Leave. To leave the definition of spouse intact or as proposed by the Employer would provide a different treatment for same-sex couples who declare spousal union (because they are in a jurisdiction where they cannot marry) than is granted to heterosexual couples who marry. The direction of the CHRT was to remove discriminatory language. The Board should have so recommended so that this issue would no longer be an impediment to settlement.

Social Justice Fund

I'll deal with the proposal for a Social Justice Fund. The Board did not comment at all on this proposal. As presented by the President of the PSAC to the Board, the Social Justice Fund is found in many collective agreements across Canada. While this is particularly so in the private sector, many public employers have recognized the need to provide some form of assistance to those less fortunate through establishing funds like this. The cost, at one cent per hour worked, is not of the magnitude that places a serious burden on the Employer. It would be a demonstration of our commitment, as Canadians, to improve the lives of others.

Day-is-a-Day

The report of the Conciliation Board has two pages devoted to this issue, but in the end, it makes "no specific recommendation." My concern is that the essence of the issue seems to have been missed. The problem is not, as the report suggests, that the Employer has failed "to demonstrate to the Alliance, to a greater degree than it has up to now, how each of the specific purposes now served by 'day' will be affected by the change to 'hours'." The implications of changing the existing language are clear. The Employer is seeking to undo interpretations of existing language as established through the grievance procedure. Their proposals in this area are hardly "inconsequential." The Employer, and other federal employers using similar language, have lost several grievances in adjudication before the Public Service Staff Relations Board, and in front of the Federal Court. The stakes are pretty clear and a recommendation should have been made so as to point the way towards a settlement. My view is that the Board should have rejected the Employer's proposals. Other Boards, such as the one established for the CCRA, have recommended that employees on "compressed" work week be granted leave in hours but that other employees on variable hours, such as those on variable shift schedules, maintain the existing language. This would mean that they would continue to be eligible to take certain types of leave in accordance with their scheduled hours of work. In the CCRA case I argued that this proposed compromise was a significant reduction in the existing provisions and a major gain for the employer which should mean that further consideration should have been given to some of the key demands of the Union.

Term Employment

Another area where the report's silence offers no guidance to the parties is in regards to Term Employment. I would recommend that two of the union's proposals related to term employment be adopted by the parties. Specifically, I am referring to the union's proposal to:

1. provide term employees with an increment for each 52 weeks of cumulative service and

2. add a sub-clause to the vacation leave article so that recurring term employees move to the next level of vacation credits on the same basis as full-time and seasonal employees.

Both of these proposals have been adopted by large-scale Separate Employers in the last round of negotiations.

CCRA introduced the recognition of cumulative service in the determination of increment periods while Parks further enhanced the treatment of term employees by adopting the CCRA language and by also adding the improvement to the service calculation for the purpose of vacation leave. Given that such a precedent has been established and has been followed by other smaller organizations, it makes good sense to recommend its adoption for the Operational Services unit.

RATES OF PAY - THE PAY STUDY AND NATIONAL RATES OF PAY

I am disappointed there was no recommendation on the implementation of any part of the Morneau-Sobeco Joint Pay study. The previous Conciliation Board had recommended a study be conducted to determine the relativity between the pay received by Table 2 employees and their counterparts in the private sector and in other parts of the public sector. PSAC had claimed for several years a serious difference in pay existed and the Employer had failed to address the issue. The Joint Pay Study, released in 2003, was to find the comparison of private sector rates of pay to those in the Federal Public Service. That study, conducted by a third party, found a serious disparity between comparable jobs exists in the rates of pay for public sector workers with those in the private sector.

The current report states:

In the collective agreement which expired August 4, 2003, the parties, by way of a Letter of Understanding, agreed "to conduct a compensation comparability study", its terms of reference also jointly agreed upon. The terms of reference did not include the requirement for recommendations or for comparative analysis of the data. In July, 2003, the external consulting firm submitted its final study to the parties (herein, the "Pay Study") in which the rates of pay of thirty-one bargaining unit classifications were compared with those of non-federal government employees, also throughout Canada, in those same classifications. While the parties hold different interpretations of the data in the Pay Study, they appear to agree that the rates of pay for the bargaining unit members ought to take into account the "gap" between the current rates of pay for bargaining unit members and the higher rates of pay for non-federal government employees, as revealed by the Pay Study. The Alliance posits that the comparator groups have rates of pay, generally, twenty percent higher than the rates of pay currently provided for in the collective agreement.

The Board report further states, in part, at page 6:

... Indeed, even a cursory analysis of the Pay Study data indicates that the pay for most (some 75%) of the thirty-one job classifications of this bargaining unit are notably below the average wage rate outside the federal public sector, i.e., at least 10% below average. Further, the parties agree that in addition to percentage increases in pay, certain pay adjustments must also be made in order for there to exist reasonable and acceptable comparisons between the pay for this bargaining unit's members and for those outside the federal sector.

The Treasury Board has not indicated the amount of the "gap" they believe is demonstrated by the Pay Study however they did offer a "Market Adjustment Differential" which would not be applied to the pay grid. That was characterized on page 5 of the report as follows:

For the GL and GS groups in all three Zones, provide for a "Market Adjustment Differential" equivalent to 15% of the gap between these employees' current rates of pay and the non-federal government rates of pay for those classifications identified in the Pay Study. (For example, the current rate of pay for the GL/GS group MDO 4 light-truck driver classification is $16.38 per hour. The Pay Study indicates a non-federal government rate of pay for light-truck driver of $20.27 per hour. The gap between the two rates of pay is $3.89 per hour. The 15% Market Adjustment Differential (i.e., 15% of $3.89) is equal to 58.35¢.) For job classifications not addressed in the Pay Study, the Employer suggests the Study data be used to guide development of an equivalent calculation.

(iii) The Market Adjustment Differential amount is to be an additional payment to employees but which amount is not to be included in the pay grid.

(iv) The GS group standard to be used for the HS group to determine the Market Adjustment Differential amount for these two groups.

(v) For the FR and HP groups, the Market Adjustment Differential is to apply, however, not on the basis of the non-federal government rates of pay in the Pay Study, which reflect the average pay rate on a provincial basis. Rather, the closest comparable municipality or region rate-of-pay is to be used to identify the gap. (For example, the rate of pay for FR group employees in Halifax to be compared with the firefighters' rates of pay in Halifax and/or surrounding municipalities/regions and not to be compared with the average rate of pay in Nova Scotia.)

(vi) Market Adjustment Differential effective August 5, 2003.

The Board found that in at least 75% of the comparisons there was at least a 10% gap however made no recommendation to even partially correct the problem.

I cannot understand the Boards failure to make any recommendation in this area. The parties agreed in the last collective agreement that a joint pay study was required. They agreed upon terms of reference for that study in the fall of 2002. They jointly agreed how to carry out the study - by hiring an outside research firm to compare jobs. They participated jointly in contracting such a firm and this was completed in early 2003. They jointly chose the jobs, approved the job summaries, agreed on what types of firms to survey and how the results should be presented. They followed the book and nothing happened.

The PSAC provided this Board with an extensive and professional presentation on the pay study. They showed how they calculated an average wage gap of 20 %. They demonstrated how that wage gap was consistent with the historical data, and they also showed how the wage gap was confirmed by other sources of data. In particular they used comprehensive municipal firefighter wage data to illustrate that the wage gap for FR using the Morneau-Sobeco results (33% wage gap) is identical to the wage gap found using comprehensive data from the International Association of Firefighters. The PSAC also presented data from Airport collective agreements where GL classifications still persist. That data showed an average wage gap consistent with the pay study. They presented additional data on the HP group, which came from an independent consultant study commissioned by the Department of Public Works. That study looked at problems in the Ottawa Central Heating and Cooling Plants and examined pay rates for stationary engineers at a number of Ontario universities. The PSAC showed a 29% wage gap between the HP rates and those at the universities. Finally, they also brought forward wage data from the Ships' Repair bargaining units (East and West) showing a major gap between certain GL sub-groups and the identical sub-groups in the SR units. As stated by the Alliance,

"The equivalent SR and GL classifications have the same qualifications, are affiliated with the same craft unions, work for the same employer, work on the same worksite, and often use identical tools. The only difference is in bargaining unit: the SR sub-groups are assigned to the Ships' Repairs bargaining units, which are tied to the performance of work on naval vessels, whereas the GL sub-groups working on these bases are assigned to the Operational Services group definition."

Yet the average SR-West trade rates (for October 1, 2002) are on average 34% higher than the average trade rate paid to the same Table 2 classifications starting August 5, 2002. And in the east, the average SR-East trade rates (for January 1, 2002) are 29% higher than the average trade rate paid to the same Table 2 classifications.

(As a footnote, I note that in the last collective agreement signed between Treasury Board and the SR-East unit, the Employer agreed to two increments for the SR-East workers, worth 4% each, in an effort to move the SR-East rates considerably closer to the SR-West rates of pay. This method of closing that wage gap is very similar to the increment system proposed by the PSAC.)

Beyond showing the Board that a wage gap existed, the PSAC also showed how closing the wage gap was consistent with past government policy and practice. The PSAC quoted from past Treasury Board conciliation board briefs and from compensation policy documents of Treasury Board to the effect that the government believes compensation should reflect the AVERAGE wage paid by other employers. The union has consistently argued rates of pay for federal employees should fall in the third quartile or seventh to eighth decile range. They showed how the government reacted very quickly to negotiate or implement significant pay increases for other groups that were the subject of independent pay studies: The CX group, the EX group, judges and MPs. In each of those cases the response was much swifter. The government responded to the EX and judges studies immediately, and the MP salary changes of 2001 were passed and signed into law within weeks of the recommendation.

This unit has been without a collective agreement for over a year, and the results of the pay study were released almost 11 months ago, and the Employer never made a proposal for addressing the results until the fourth day of the conciliation board.

The Employer did not make any presentation to the Board on the matter of the pay study. They presented no verbal or written evidence disputing the results. In fact, they would use the results of the study to calculate "market adjustments."

However, the proposal by the Employer is flawed in several ways. First it only proposes an adjustment of 15% of the difference between the public service rates and the private sector rates for the GL and GS group. Since the wage gap averages 20%, they are suggesting an average improvement of something like 3%. One is left with one of two conclusions. Either the employer thinks the members of this unit should remain some 17% behind the market, or they believe the adjustment should be spread over several agreements. If we assume agreements of 3 years duration it would take 20 years to eliminate the gap, assuming the Employer matched the private sector increases over that period, something they have not been doing recently.

The second major flaw is that the adjustments are not on salary, but are only to be paid as separate "market adjustments." Not only does this significantly complicate the compensation system for this group, but it means the adjustments would not be calculated for overtime purposes and could perhaps be treated differently than pay for other reasons. The joint pay study was a study which looked at base salary rates and there is no reason to make adjustments that do not form a part of salary.

The third major flaw in the Market Adjustment proposal is that it fails to eliminate the "regional rate" of pay system for GL-GS-HS and it would extend the concept to the FR and HP groups. For FR they propose a city by city pay comparison. To compare city by city rates, for example, Halifax rates for firefighters as the comparator is to set collective bargaining back 35 years. The clear trend is for national rates of pay. The GL and GS groups have gone from 36 pay zones to 3 and were expecting to eliminate all zones in this set of negotiations. Other groups which have pay zones have reduced them in the last round of bargaining and propose to eliminate them in this round. The Conciliation Board in the Canada Revenue Agency (CRA) case has recommended the elimination of pay zones for that bargaining unit. Specifically, that report states:

The principle of equal pay for equal work militates towards abolition of wage differentials for employees of the same classification group engaged by the same employer. That being the case, the Board proposes abolition of a two-tier zone rate structure for the GL and GS groups in favour of a single grid national rate.

There is no rationale for maintaining the existing pay zones other than to pay some employees less than others performing the same work, let alone extending them to other classifications. As demonstrated by the PSAC's verbal and written presentation, if the regional rate of pay system ever made sense, it no longer does. They have shown that not once since their inception in 1967 were regional rates of pay ever adjusted to reflect emerging regional pay trends. They have also shown that the number of GL and GS regional pay zones have been steadily reduced over time, from 36 in 1967, to 25 in 1972, 22 in 1975, 16 in 1984, 10 by 1989, 7 in 1996, and 3 in 2000. Two separate employers, the Canada Customs and Revenue Agency and Parks Canada went one step further, reducing in 2000 to two pay zones. Less than 6% of federal public employees are on regional rates, of which the vast majority are Table 2 members. This produces within the Table 2 membership a strong feeling that they are being discriminated against in comparison to other classifications, who work side-by-side with them across the country. The system is complex, requiring hundreds of separate wage rates for each classification, level and region, most of which are never used. The PSAC also argues that the regional rates of pay system would have been incompatible with UCS and remains incompatible with the trend towards bargaining unit wide classification standards.

Finally, the regional rate of pay system has been a major irritant to labour relations for this unit for several decades, and elimination of regional rates is the right thing to do to improve the relations between this unit and the employer.

The PSAC has proposed a rational way to both close the wage gap found in the Table 2 pay study by integrating the rates, by establishing a 3 step pay grid and by moving all employees onto the grid. Their original proposal to the Board was reasonable as it simply tried to close the wage gap to an average level.

Their revised proposal was even more reasonable, because it eliminates the pay zones for the GL, GS, and HS over the life of the contract. Their revised proposal also makes a reasonable move towards the average wages found in the Morneau-Sobeco study, but again does so over the life of the contract. The wage adjustments take place over a period of time depending on where the employee would be slotted into the grid. Through both a higher dollar per hour increase in the first year and two increments in each of the second and third years it continues to recognize that the FR and HP classifications are particularly far behind and require a larger catch-up.

The reasonableness of the PSAC position does not seem lost on the Chair, who states,

In that respect, the Alliance proposal regarding "catch up" tends more towards reasonableness than does the Employer's current proposal.

However, the Chair did not make a recommendation on the matter. He says that the parties need to discuss this more "in order to establish contours of agreement and disagreement." This is the key area where the parties have been apart during some 25 days of bargaining and conciliation spread out over 11 months. This is a key area where I think the Board had a responsibility to point towards an area of settlement as the parties have clearly been unable to do on their own. By not making a recommendation the parties are headed for labour conflict. This could have been avoided.

Given the "reasonableness" of the PSAC position, I would recommend that the PSAC proposal as reproduced in the report be used to close the Table 2 pay study wage gap and to eliminate the zone system.

RATES OF PAY - GENERAL ECONOMIC INCREASES

I must also dissent with the recommendations made for a general economic increase for the unit. The chair seems to feel that this unit should be subject to a lower economic increase, or an economic increase at the lower end of the settlement "range," because of the parties' "agreement" to close the wage gap. I have serious problems with this formulation. First of all, there is as yet no agreement between the parties on how to close the wage gap. Second, why should the PSAC agree to close a wage gap for this unit, only to recreate it by agreeing to lower general economic increases in return? The recommendation in this report is lower than some other settlements in the federal public service, and lower than the general settlement trends which exist outside. Third, the Chair is aware there are several other major units currently in bargaining and that the general economic increases tend to follow each other. To penalize this unit in this area in return for some restructuring money points the way to lower settlements for many other groups. This is not helpful.

Several points are in order here:

• The union highlights Statistics Canada data showing that the Consumer Price Index went up in 2003 by an average of 2.8%. Federal workers suffered a significant decline in real wages through the 1990s and there is no rationale for seeing their real wages reduced further. In fact, the rationale points in the other direction: steady gains in real wages through economic increases which exceed the inflation rate.

• On page 151 of the union's brief, 41 recent settlements are summarized. The average wage settlements for 2003 are 2.79%. The average wage settlement for 2004 is 2.80%. The average for 2005 is 2.73%. Several other government employers are settling contracts at 3.0% a year for 2003, 2004 and 2005, notably the House of Commons units and Canada Post. As demonstrated by that chart, 18 out of 41 of these agreements had additional monies by way of restructuring, and 22 of 41 had additional monies through other adjustments such as harmonization, new classifications systems, lump sums and the like.

• The recommendation for increases of 2.5%, 2.5% and 2.0% falls short of what others have recently recommended or awarded. For example, in the case of an Arbitration Award for the Ship's Officer bargaining unit issued in early August, Board chair Morton Mitchnick awarded general economic increases of 2.5% in each year of a three year agreement. In that Award a summary of other PSSRA 1-1 settlements was outlined:

  In a closely-related settlement, in terms of both operation and contract years, the Ship Repair-Chargehand and Production Supervisor Group (East) recently were awarded 2.5% effective April 1, 2003, 2.5% 2004, and 2% 2005. That award also provided at its front end the deletion of the bottom five increment steps, and the addition of a new top step. Ship Repair (West) has settled as well now, showing 2.5%, 2% and 2%, effective October 1 in each of those same three years. Law recently settled on its own at 2.5% February 27, 2004, and 2% March 1, 2005. The Translation Group settled this year for 2.5% effective April 2003 and 2% April 2004. Air Traffic Control settled at 2.5% as of July 2003. In another arbitrated settlement the Applied Science and Engineering Group received 2.5% in 2003 and 2.5% in 2004, with new top increments added at the beginning of the contract in 2002. The Computer Science Group contract in its final year provided a wage increase of 2.5% effective December 2003, with an additional new increment step at all levels. The Financial Management Group received 2.3% for its final contract year in 2003, plus a new top increment for certain classifications in 2002. And the Civil Aviation Inspector Group got 2.5% in 2003, the third year of its contract, plus the elimination of the first step and addition of a new top step for all classifications effective the start of the contract in 2001. The board finds this survey of settlements instructive both as to the pattern of general increases, and the method of implementing some measure of "catch-up" in the public-sector wage grids now before us.

  These other settlements did not prevent the Chair of that Board from awarding increases of 2.5% for each year of a three year arbitral award, in addition to awarding members of that unit an increment worth an average of 3.5%. In other words, this unit will received non-compounded increases averaging 11.0% over 3 years - this for a unit which does NOT have an independent joint pay study showing that the members of the unit are 20% behind the average paid by other employers in the private and public sectors.

• More recently, the Conciliation Board established for the Canada Customs and Revenue Agency recommended increases of 3.0% for 2003, 2.75% for 2004 and 2.5% for 2005.That chair recognized several key points about the performance of the Canadian economy, and I quote:

  In addressing the issue, the parties had recourse to the same data on the shape of the Canadian economy generally, and in particular wage settlement trends in both the private and the public sectors. There is a recognition of the robustness of the Canadian economic performance since the abandonment of deficit financing by government and the commitment to balanced budgets - a trend which commenced early in the last decade. Since 1996 the Federal government has posted budged surplus which on average exceed budget projections by 10 billion dollars. Economists predict a growth rate in the Canadian economy of 2.7% in 2004, and one of 3.3% in 2005. Labour force participation is at a all time high, the unemployment rate being down to 7% in the fourth quarter of 2003 with an increase in the labour force participation rate to close to 70%. Increases in the base salary rates negotiated in the public sector have been outpacing inflation since 2001 with average increases in 2003 of 2.9%, and in the first quarter of 2004 of 2.8%.

• The PSAC also brought forward data on wage changes generally in the economy. On page 144 of their brief they show that surveys by more than half a dozen private consulting firms such as Mercer, Aon, Hay, Watson Wyatt etc. show increases of between 3.1% and 3.5% were planned for the year 2004. Even as I write this, I read a CP news report from this weekend with the results of the Hay Group's Compensation Report for 2005. It reports anticipated pay increases averaging 3.2% in 2005 up from 3% reported earlier. Watson Wyatt Worldwide released a similar compensation survey which forecast average salary increases for the coming year at 3.4 per cent.

The general economic increases for this unit need to ensure that they do not fall behind other federal units, or behind wage changes occurring generally in the economy. To do otherwise would undermine the effect of any restructuring agreed to as a result of the pay study. For that reason, I recommend that the economic increases for August 4, 2003, 2004 and 2005 be at 3.0% each year as proposed by the PSAC in their final pay position. I concur also with their proposal for a partial year extension to December 31, 2006 with an additional increase of 1.5%.

Signed at Nanaimo on September 7, 2004

J.E. Wolfgang