FPSLREB Decisions

Grievances referred to adjudication

[1]   This matter arose following the termination of service contracts between Her Majesty the Queen in Right of Canada, represented by the Minister of the Department of the Solicitor General of Canada, and the grievors.

[2]   The grievors request the following corrective action:

1. We request that the termination letters of 07 April 2003 and 09 May 2003, be canceled and stricken from all files within the service;
2. We request to be reinstated, from the date we were terminated, and returned to our former position as a full time Employees, and as Program Facilitators at Grande Cache Institution of Correctional Services Canada;
3. We request to be made whole which is in fact to be paid back from the date of our termination;
4. We request that there be no requirement for a probationary period, as we have been deemed Employees from 01 January 2001, and have expired this requirement (refer to letter of 04 December 2002, from Canada Customs and Revenue Agency);
5. We request that upon reinstatement, our seniority will be recognized to 01 January 2001, as continuous service;
6. We request that upon reinstatement we are given a classification at the WP-4-CPO level;
7. We request to be compensated retroactively to 01 January 2001, in full for annual leave and statutory holidays; and
8. We request to be compensated retroactively to 01 January 2001 with respect to back-pay commensurate with our classification level (WP-4-CP0).

         [Sic throughout]

[3]   On May 8, 2003, Tanya Estwick and Amanda Quintilio filed grievances following the termination of their employment as Sex Offender Co-Facilitators in the Sex Offender Program at the Grande Cache Institution (GCI), in Grande Cache, Alberta.

[4]   The grievances were referred to adjudication on December 14, 2004.   The Board originally scheduled a hearing for May 31-June 2005.   By letter dated May 4, 2005, the grievors requested a postponement of the hearing.   The employer agreed to the request and the Board granted the postponement.

[5]   At the opening of the hearing, the parties introduced on consent an Agreed Statement of Facts (Exhibit A-1), which included 17 appendices.   At the request of the employer, and with the agreement of the grievors, the names of four inmates and their institution numbers appearing in Exhibit E-15 were blacked out for privacy reasons.

[6]   The Agreed Statement of Facts reads as follows:

1.        In early December 2000, the Correctional Services of Canada (“CSC”) placed an advertisement in the Grande Cache Mountaineer , a weekly newspaper in Grande Cache, Alberta. . . . The ad explained that the Grande Cache Institution (“GCI”), a minimum security federal penitentiary located in Grande Cache, Alberta, was looking for two people with university degrees to facilitate sex offender programming for $22.00 per hour.

2.        Tanya Estwick and Amanda Quintilio, the Grievors in this matter, applied for the [positions/contracts] and were interviewed later that month at GCI by a panel of three members, all of whom were employed at GCI.   The Grievors were both engaged by CSC effective January 1, 2001.   Their contracts indicated that they were not engaged as employees but rather as “contractor(s)”.

3.        The Grievors had qualifications for the [positions/contracts].   Ms. Estwick has a Bachelor of Arts degree in Community Studies conferred by University College of Cape Breton in 1997, and a Bachelor of Education degree conferred by the University of Maine at Fort Kent in 2000.   Ms. Quintilio has a Bachelor of Arts degree in Psychology and Anthropology, conferred by the University of Alberta in 1998.

4.        The Warden of GCI was, at all relevant times, Wendell Headrick.   The Warden had delegated authority from the Public Service Commission to make appointments pursuant to the Public Service Employment Act ( PSEA ). . . .

5.        The CSC adopted a policy on term employment in 2003. . . .

6.        At the time the Grievors were engaged, the Treasury Board of Canada had a contracting policy in place. . . .

Contracts

7.        CSC offered the Grievors work as Sex Offender Facilitators starting in January 2001.   They were presented with identical three-month contracts, ending on March 31, 2001.   The contracts indicated that they were not engaged as employees but rather as “contractor(s)”.

8.        The Grievors started work for GCI on January 1, 2001, facilitating the National Sex Offender Program developed by CSC to treat and rehabilitate convicted sex offenders.   Their supervisor was the GCI Chief of Psychology, Mr. Ford Cranwell.   When the three-month contract expired on March 31, 2001, Mr. Cranwell instructed the Grievors to continue working until a new contract was drafted.

9.        In June 2001, new contracts were presented to the Grievors by GCI administration.   The contracts were for a one year period.   Otherwise, the contracts were essentially the same as the first three-month contract.   The Grievors signed the new contracts, which were scheduled to end on July 1, 2002.

10.      The Grievors 2001-2002 one year contract expired without a new one in place.   They continued working without a written contract until another one-year contract was signed on July 31, 2002.   The terms of the new contracts indicated that they were for the period July 2, 2002 to July 1, 2003.   Again, these contracts were similar to the previous ones.   Ms. Quintilio also signed an identical contract at that time.

11.      The contracts indicate that the Grievors are paid a fee per hour for services rendered, with monthly and yearly maximums.   There is no provision to be paid for benefits, sick time, vacation or statutory holidays.   At no time did the Grievors claim sick time, vacation, statutory holidays, and at no time were union dues deducted.   They submitted an invoice twice per month for payment   In their final contracts, they were paid $22.98 hourly, with a monthly maximum of $3,735.50.

12.      The Grievors were never given the opportunity to negotiate their rate of pay.   They were simply told by GCI that the rate was set by CSC and was set at the same level as the regular wages received by program delivery officers, who are indeterminate employees.

13.      The contracts also stated that the Grievors could provide a replacement when they were absent.   In 2002, the Grievors asked their supervisor, Dr. Cranwell, about this provision.   He said that it was not possible to exercise the clause because anyone they selected would have to be approved by GCI and, in any event, there were not any qualified people in their small town.

Work at Grande Cache Institution

14.      During their time at GCI, the Grievors were provided with an office they shared in the Psychology Department that had their name stencilled on the glass panel.   In addition, they were given their own computers, mailboxes, and a telephone line with an assigned extension.   Their office supplies were provided by GCI.   They were also registered on the CSC e-mail system and received the same group e‑mails as indeterminate staff.

15.      The Grievors primary duties involved meeting with sex offenders on a regular basis to facilitate the treatment and rehabilitation goals of the CSC’s National Sex Offender Program. In this regard, they assisted offenders in understanding the impact of their crimes on themselves, their victims, and the community.   They were also required to help offenders learn the skills and techniques necessary to generate self-awareness and control inappropriate sexual behaviour. Finally, they administered psychological testing and conducted interviews to assess the progress of individual offenders and drafted reports regarding the results.

16.      The Grievors attended a national training program with CSC regarding the delivery of the National Sex Offender Program.   GCI paid the Grievors for their time and expenses for this five-day program held in Edmonton, Alberta, from May 13 to 17, 2002.   GCI also provided other training opportunities to them such as SARA training (a one day program in the summer of 2002 on domestic violence risk assessments) and Sex Offender testing (a one day program for sex offender risk assessments).

17.      The Grievors also attended a two week course at GCI for new personnel working at GCI.   This familiarized them with the rules, regulations, norms and health issues encountered in a jail.   The Grievors took this course with approximately twenty other people, all of whom were indeterminate staff.

18.      The Grievors were required to sign documents which indicated their commitment to observe and comply with certain policies. . . .

19.      In addition to their primary duties with the Sex Offender Program, the Grievors were also occasionally assigned clerical duties in the Psychology Department.   For example, one of the Grievors was always expected to get the department keys and mail every morning.   They were also asked at times to provide administrative information to CSC National Headquarters. . . .

20.      In May 2002, Mr. Cranwell instructed the Grievors to perform the duties of the Psychology clerks, including answering phones, testing, sharing reports with inmates, appointment management, file management, and so on.  When the Grievors questioned Mr. Cranwell about this extra clerical work not being part of their job description, he made an amendment to their new contract, which was overdue for renewal, adding “other duties as assigned by the supervising psychologist” in the Statement of Work section.   They were not offered extra pay for these duties nor any opportunity to refuse their performance.

21.      GCI set the Grievors’ hours of work, which were 8:00 am to 4:00 pm, Monday to Friday.   The Grievors were expected to notify their supervisor, Mr. Cranwell, if they were going to be absent.   He would also want to know the specific reason why they were unable to attend work.

22.      The Grievors were required by GCI to attend department and Institution meetings, which were held at different times on a weekly or bi-weekly basis.   These meeting usually involved matters outside their responsibilities. . . .

23.      GCI entrusted the Grievors with a number of significant security matters.   They were given access to all offender files as well as passwords and unlimited access to sensitive computer systems with highly confidential records (the Offender Management System, Infonet, and RADAR) and CSC Security Briefings.   They were also given swipe tags for entry to nearly all parts of the institution and personal keys to their office.

24.      The Grievors’ supervisor, Mr. Cranwell, closely directed their work.   The inmates whom they treated were assigned by Mr. Cranwell and he would decide what programming was appropriate.  Mr. Cranwell set deadlines for the Grievors to submit reports regarding inmates and the program generally.   Sometimes, when the Grievors were conducting interviews with inmates in their office, Mr. Cranwell would enter without knocking or otherwise announcing himself, to monitor what they were doing.   He also interrupted their work on several occasions, advising them to stop what they were doing immediately because, according to him, something else was more important.

25.      Mr. Cranwell was also responsible for providing warnings.   One time, for example, Mr. Cranwell informed the Grievors and others that the Warden of GCI had talked to him about personnel being late in the mornings and leaving early in the afternoons.   Although their contracts do not state specific hours of work, the Grievors understood this to be a reprimand.   In addition, if the Grievors failed to check their personal protection alarm with GCI every morning, Mr. Cranwell would be notified and he would warn them verbally.

26.      The Grievors were made to feel as an integral part of GCI in other ways.  For example, they were given institutional “perks” such as free lunch bags, pens, water bottles and fanny packs.   They were also invited to and attended staff barbecues celebrating events such as Public Service Week.   On one occasion, GCI gave Ms. Estwick an advance on her pay cheque when she requested it.

Cost savings for CSC

27.      In October 2002, the Grievors were advised that the GCI was facing a financial crisis and all contracts were on the table for review.   Mr. Cranwell suggested to them that they should offer to give up 40 days of their contract (i.e., 8 weeks and approximately $7,500 each) in order to secure their [positions/contracts]. They did so and GCI administration accepted.   Mr. Cranwell’s approval was required for the days to be missed.

28.      Mr. Cranwell prepared a written memorandum to the Warden of GCI during this period to justify keeping the Grievors as contractors.   The memorandum, dated October 10, 2002, recommended that they be kept because their contracts represented savings that were “quite spectacular”.   In that regard, Mr. Cranwell explained that both of them together were less expensive than one indeterminate program officer because they were not paid for benefits, sick days, holidays, and so on. . . .

Investigation by Canada Customs and Revenue Agency

29.      The 2002-2003 contract presented to the Grievors by GCI was somewhat different than previous years in that it suggests that the Goods and Services Tax (“GST”) should be applied to their invoices.   Ms. Quintilio applied for and received a GST number from CCRA.   Ms. Estwick also applied for a GST number in July 2002, but was contacted by Brenda Woo of the CCRA who explained that her application and contract would be investigated by the CCRA.

30.      Ms. Estwick was interviewed by Ms. Woo on the telephone both at home and at GCI.   To the best of Ms. Estwick’s recollection, these conversations occurred in August and September 2002.   Ms. Woo asked her several questions about the work she performed, her hours of work, the equipment she used, the direction she received from GCI in the performance of her work, and so on.   Ms. Estwick also advised Ms. Woo that Ms. Quintilio was working for GCI on the same basis as herself.   Ms. Woo asked for and was provided with a copy of Ms. Estwick’s contract.

31.      Ms. Woo indicated to Ms. Estwick that she would be interviewing management personnel at GCI in the course of her investigation.   Ms. Woo subsequently interviewed members of GCI management.

32.      On December 4, 2002, Ms. Estwick was notified by Ms. Woo that the CCRA had rendered a decision regarding her situation. . . .

33.      On February 4, 2003, Ms. Estwick and Ms. Quintilio were instructed by GCI to attend a meeting with Mr. Cranwell, Mr. Wallis, and Mel Sawatsky, an auditor from the CCRA.   The meeting was held in the Deputy Warden’s office, who was away at the time.

34.      Ms. Sawatsky (CCRA) started the meeting by advising the Grievors that they were not contract staff but in fact were “employees of the Federal Government of Canada” and had been since 2001.   He then handed the Grievors T-4 slips for the 2001 and 2002 tax years and stated that their contracts for services were “null and void”. . . .   Mr. Sawatsky also informed Ms. Quintilio that her GST number was cancelled.

35.      In March 2003, GCI paid the CCRA over $40,000 for the outstanding amount owing for CPP and EI premiums for Ms. Estwick and Ms. Quintilio from 2001 to 2002.

36.      Notwithstanding the above payment on February 4, 2003, GCI did not deduct CPP or EI from Ms. Estwick’s or Ms. Quintilio’s pay cheques at any time.

37.      On March 24, 2003, the Grievors had still not heard any information about their employee numbers so Ms. Quintilio called Mr. Wallis and he asked both Grievors to his office.   In the meeting that followed, Mr. Wallis verbally advised the Grievors to continue paying themselves as contactors, but to stop charging GST.   However, he also said that they would have to file their tax returns as employees.   When questioned about employee numbers and retroactive back pay, Mr. Wallis said that CSC had decided “not to go that way”, and that the Grievors would be receiving nothing further by way of compensation.   Ms. Quintilio asked Mr. Wallis whether CSC regarded them as contactors or employees.   He responded that they were not contractors nor were they employees.

38.      On April 17, 2003, Ms. Quintilio and Ms. Estwick received identical letters dated April 7, 2003 from Mr. Wendell Headrick, the Warden for GCI.   The letters stated that, although the CCRA ruled that they were employees under a contract of service, it did not require that an appointment be made pursuant to the Public Service Employment Act . . . .

39.      Following this letter, the Grievors requested a meeting with Mr. Headrick.   Further to this request, they met on April 17, 2003, with Mr. Headrick and Mr. Paul Bailey, the Acting Deputy Warden.   During this meeting, the Grievors explained that the CCRA had advised them that their contracts were null and void and they were employees of CSC.

40.      On April 23, 2003, Ms. Quintilio received a letter from Tim Leis, the Assistant Deputy Commissioner for CSC Corporate Services in the Prairie Region.   The letter stated that, notwithstanding the CCRA ruling, the Grievors had not been appointed under the PSEA and therefore were not federal public servants. . . .

41.      On April 30, 2003, the Grievors were advised by identical letters that the Crown wished to terminate their contacts effective May 9, 2003. . . .

42.      The Grievors filed a joint grievance of their termination on May 8, 2003. . . .

43.      GCI’s Chief of Human Resources responded to their grievance with a letter dated May 8, 2003.   She advised that their grievance was refused on the basis that they were not employees under the PSEA and therefore the grievance process cannot be applied. . . .

44.      The Grievors subsequently requested Records of Employment from GCI so they could obtain Employment Insurance benefits.   Instead, GCI provided letters that reported information similar to a Record of Employment. . . . The Grievors applied for and received Employment Insurance benefits.

. . .

[ Sic throughout]

[7]   Initially, the grievances were not accepted by the Correctional Service of Canada (CSC), as the grievors had not been appointed to a position pursuant to the former Public Service Employment Act (PSEA), R.S.C., 1985, c. P-33. Their status as employees was the subject of a judicial review proceeding in the Federal Court (Estwick and Quintilio v. Canada (Treasury Board), 2004 FC 970).   In short, the Court found: “. . . The applicants are obligated to exhaust the grievance process and if applicable, the arbitration process, before engaging this Court’s procedures. . . . Another way of putting it is the applicants’ application for judicial review is premature at this stage.”   As a result of the Court’s ruling, the CSC and the Union of Solicitor General Employees, a component of the bargaining agent Public Service Alliance of Canada agreed to refer the grievance to adjudication.

[8]   On April 1, 2005, the Public Service Labour Relations Act, enacted by section 2 of the Public Service Modernization Act, S.C. 2003, c. 22, was proclaimed in force.   Pursuant to section 61 of the Public Service Modernization Act, these references to adjudication must be dealt with in accordance with the provisions of the Public Service Staff Relations Act, R.S.C., 1985, c. P-35 (the "former Act").

[9]   The employer called four witnesses and introduced five exhibits.   The grievors called one witness but did not introduce any exhibits.

Opening remarks

[10]   The grievors stated that this case involves a threshold issue; that is, are the grievors employees or not?   They stated that although the CSC identified them as contractors, the Canada Revenue Agency (CRA) regarded them as employees.

[11]   The employer replied that the grievors were not appointed through a formal instrument of appointment; they never received a formal offer of appointment and no appointment was made by a delegated authority.   They were hired by the CSC as contractors and were not employees of Her Majesty the Queen in Right of Canada.

Summary of the evidence

[12]   Mel Sawatsky is a Payroll Trust Examiner at the CRA.   His duties include issuing compliance letters to employers in respect of deductions to be made for employees.   The witness testified that, although he never saw Brenda Woo’s letter of December 4, 2002 (Exhibit A-1, tab 10), he was aware of her ruling whereby she determined that the grievors were employees hired under a contract of service.   He testified that he presented the grievors with T4 slips (Exhibit A-1, tab 11) at a meeting held with them on February 4, 2003.   The witness stated that it was his job to prepare an assessment of Employment Insurance (EI) and Canada Pension Plan (CPP) contributions that were outstanding as a result of Ms. Woo’s ruling.

[13]   In cross-examination, when referred to the grievors’ T4 slips, the witness acknowledged that deductions were made for CPP (box 16) and EI (box 18) but there were no entries in respect of pension adjustment (box 52), income tax deducted (box 22) and union dues (box 44).   The witness explained that the statement that he made to the grievors at the meeting of February 4, 2003 to the effect that they were not contract staff but were, in fact, “employees of the Federal Government of Canada”, was not an accurate reflection of his intent.   He stated that he understood from Ms. Woo’s ruling that the grievors were in an employer-employee relationship rather than a contractual relationship.   At no time did he declare them to be Public Service employees, as he does not have the authority to do so.   He indicated that, for purposes of EI and CPP deductions, they were considered employees by the CRA.

[14]   The witness further stated that his expertise is in respect of financial matters and not employment issues.   The CRA has rules that apply to an employer-employee relationship: whether it is pensionable service and whether deductions for CPP and EI, or income tax for that matter, are to be made.   As far as the scope of Ms. Woo’s ruling is concerned, he stated that it would be better to question her.

[15]   The witness noted that he was not the one quashing the grievors’ contract; only a judge could do that.   His job was to inform the CSC, through William Wallis, the GCI Financial Control Officer, of the amount of CPP and EI contributions that were outstanding.

[16]   Ford Cranwell, the Chief of Psychology at the GCI, stated that he does not possess any delegated staffing authority under the PSEA nor has he ever exercised such authority or purported to.   He noted that he was responsible for the contract process that involved hiring the grievors.   He was instrumental in drafting the contract and selecting the grievors as the successful candidates.  He signed their invoices and supervised them to ensure that they fulfilled the terms of their contract.

[17]   The Sex Offender Program is a mandated program.   Prior to the grievors’ arrival at the GCI, two correctional officers had volunteered to work in the Program on an acting basis.   However, they had to return to their substantive positions and it was therefore decided to pursue other options, as the Program’s day-to-day services had to be delivered.

[18]   The witness stated that, although the Sex Offender Program receives funding from National Headquarters, it is insufficient to pay the salary of employees that could be hired as terms or full-time equivalents (FTEs).   He stated that it was brought to his attention through the CSC’s Regional Headquarters that, although there were operational and maintenance (O&M) funds available, that money could not be used to pay salaries.   The witness stated that the grievors were hired under a contract and not under the provisions of the PSEA.   He noted that, although he is not an expert in interpreting the PSEA, it was his understanding that, in order to hire the grievors pursuant to the PSEA, he would need the delegated authority to do so and that a person-year or a FTE position had to be available.

[19]   The witness agreed that the advertisement in the Grande Cache Mountaineer (Exhibit A-1, tab 1) for the Sex Offender Co-Facilitator contract position requested that candidates possess an undergraduate degree (BA, BSC).   Although a number of applications were received, only three persons, including the grievors, were interviewed for the position.

[20]   The witness testified that the grievors were hired as contractors to provide a service to the GCI and he did not consider them to be federal government employees.   He stated that they would have had to apply for a position through a competition in order to become indeterminate employees.   He noted that Ms. Quintilio had, in fact, applied for a competition for a Parole Officer position but was unsuccessful.

[21]   The contract that the grievors signed with the GCI could be terminated at any time by either party.   The witness stated that it was his understanding that the grievors’ salary and benefits were significantly less than those of a FTE.   He believed that it would cost approximately one-third less to hire persons under contract because they were not entitled to the same benefits as FTEs.

[22]   When referred to Exhibit A-2, tab 2, page 2, the witness identified it as an invoice (#TE-0009) submitted by Ms. Estwick for the hours that she worked between April 9 and 20, 2001, which included 7.5 hours for Good Friday and 7.5 hours for Easter Monday.   He stated that the grievors were not paid for those two days because, as contractors, they were paid only for the hours during which they provided services on site.

[23]   In cross-examination, the witness stated that the correctional officers who worked as Co-Facilitators in the Sex Offender Program were doing so on an acting basis, as there were no FTE positions available.

[24]   The witness stated in relation to the grievors’ situation that:   “You do not hire a contract; you award a contract.”   He agreed that the advertisement in the Grande Cache Mountaineer stated that it was a term position.

[25]   The two other persons involved with the selection process were identified by the witness as Jarkko Jalave (Staff Psychologist) and Judy Joachim (one of the correctional officers that were in the acting assignment).   He stated that since there were no FTE positions available, the GCI wanted the best-qualified candidates to fulfill the requirements of the contract and not the best-qualified candidates that could be appointed under the PSEA.

[26]   At the relevant time, Wendell Headrick was the Warden at the GCI.   He testified that he alone had the delegated staffing authority to appoint a person to a position pursuant to the PSEA.   He stated that he never offered the grievors a position at the GCI.

[27]   The witness identified a letter that he sent to Ms. Estwick on April 7, 2003 (Exhibit A-1, tab 12) following the CRA’s ruling and in which he reiterated her status at the GCI.   He noted that he never considered the grievors to be employees but viewed them as contractors.   The witness stated that he still maintains that opinion.

[28]   In cross-examination, the witness agreed that he was ultimately responsible for the Sex Offender Program and that the necessary funding came from National Headquarters.   Following consultation with Human Resources, a decision was made to hire contractors as it fitted the needs and resources available.

[29]   The witness agreed that the Sex Offender Program is now being staffed by employees of the GCI who have been trained to meet standards set by National Headquarters.   He also agreed that the employees providing the Program’s day-to-day services perform the same duties that the grievors did while they were employed at the GCI.

[30]   When referred to a memorandum that he sent to all staff at the GCI on January 24, 2001 (Exhibit A-1, tab 6) regarding “compliance to the law and policy”, the witness explained that he relied on supervisors to ensure that the appropriate persons received the memorandum and that it was not his intention that the grievors receive it.

[31]   In re-examination, when asked why the grievors had received his memorandum, the witness replied that he did not know why they had, as they were not employees but were hired under a contract.

[32]   William Wallis held the position of Financial Control Officer at the GCI at the relevant time.   He testified that he did not have delegated staffing authority and at no time did he exercise, authorize or purport to authorize staffing authority.

[33]   The witness confirmed that he signed the Articles of Agreement (contract) (Exhibit A-3, tab 1) as the certified authority to ensure that there were sufficient funds to pay the grievors.

[34]   With respect to the meeting of February 4, 2003 where Mr. Sawatsky informed the grievors, Mr. Cranwell and Mr. Wallis that the grievors were in an employee-employer relationship, the witness stated that he was shocked.   He stated that he panicked, as he was not aware of any position numbers having been assigned, since those numbers are created by the Regional Headquarters.   After the meeting, he contacted the Regional Headquarters and was informed that the grievors were not employees but contractors.   Regardless of Mr. Sawatsky’s statement, the witness stated that he had to pay the grievors as they were performing a service.

[35]   In cross-examination, the witness confirmed that his duties consisted in providing financial advice to senior management on how and where to spend the money allocated to them by National Headquarters.   The money allocated to the GCI consisted of O&M funds and salary dollars.   He stated that Mr. Cranwell received a budget for salaries and O&M funds and it was Mr. Cranwell who decided where the money was to be allocated.

[36]   When questioned about Ms. Woo’s ruling (Exhibit A-1, tab 10), the witness stated that he did not have the authority to appeal the ruling.   Although he asked the Regional Headquarters if they were going to appeal the ruling, he was advised that this would be up to the legal department at National Headquarters.

[37]   When referred to the meting of February 4, 2003, the witness stated that he had no deductions for CPP or EI and no tables to determine how much money was owed to the CRA.   He recalled Mr. Sawatsky stating words to the effect that the grievors’ contracts were null and void but it was something with which he was not familiar, as he was not responsible for staffing or classification issues.   He stated that his job was “to issue the cheques”.

[38]   The witness further testified that the GCI received an invoice from the CRA and that the CSC paid both the required employer’s and employee’s contributions.

[39]   Dianne Bird is presently a Labour Relations Officer with the CSC.   She has worked for approximately 29 years in the Public Service and, during 20 of those years, she has been involved with staffing.

[40]   She identified Exhibit E-2, tabs 1 to 17, as comprehensive staffing documents designed to assist managers on the steps to be followed for the external staffing of a position within the Public Service.   The witness stated that she assisted in the development of this document.   She stated as well that, for external hiring, the Public Service Commission (PSC) is always involved in the process.   I will briefly summarize the other relevant documents to which she referred:

Tab 4: a Statement of Qualifications for a position, which indicates the title, group and level, education and experience required, the official language, knowledge, abilities, personal suitability and reliability screening requirements.   According to the witness, this document must be sent to the PSC every time the CSC considers hiring externally.   The witness also stated that the PSC will determine the area of competition.

Tab 5: a draft job poster sent to the PSC for approval.   Once the PSC approves the poster, it is responsible for advertising the position.   This can be done online or through the newspapers, job fairs, etc.   On the front page of the poster, the PSC displays its own reference number.

Tab 6: a request for a clearance number to the PSC, which then decides whether or not approval to hire externally or internally will be granted.   Only once the PSC has granted a priority clearance number can the selection process begin.

Tab 7: the Screening Board Report that is sent to the PSC to screen the candidates and their applications.

Tab 8: Signed Statement of Persons Present at Screening Board.   This is a PSC document that requires the selection board members to declare that they are able to render an impartial decision and that they are not related to any of the candidates.

Tab 17: a letter of offer that indicates the competition number, the classification of the position and the PSC priority clearance number.  It is a “CSC appointing document” according to the witness or, in other words, the CSC’s letter of offer.   The witness also noted that this letter of offer requires the successful candidate to either accept or decline the terms and conditions of employment. She stated that the grievors never received such a letter from the CSC.   She also stated that at no time were verbal offers of employment made to the grievors.

[41]   The witness also confirmed that Exhibit A-1, tab 3, is the CSC’s Commissioner’s Directive on Delegation of Authority in The Area of Personnel and Training.   She confirmed that external recruitment for the appointment of candidates is delegated by the PSC to the Commissioner, and to the Warden.   She noted that this does not include acting wardens.

[42]   In cross-examination, the witness agreed that the Statement of Qualifications for the Sex Offender Co-Facilitator position was similar to the work description of a Correctional Programs Officer (WP-4) (Exhibit E-2, tab 2).

[43]   The witness reaffirmed that, for external hiring, the PSC does the advertising only after the CSC has been given a priority clearance number.   She also confirmed that the Warden was the only person who had delegated staffing authority while the grievors were working at the GCI.

Summary of the arguments

For the Grievors

[44]   The grievors argued that the CSC considered them to be independent contractors, whereas the CRA ruled them to be employees.   The issue to be addressed is the definition of the term “employee”.

[45]   The grievors cited Canada (Attorney General) v. Public Service Alliance of Canada, [1991] 1 S.C.R. 614, where it was found that there is no room in law for a de facto public servant who is neither fish nor fowl.

[46]   The grievors agreed that appointments to positions in the Public Service are made pursuant to the PSEA.   They argued that they were not formally appointed through the PSEA but there was an appointment regardless of whether it was the specific intention of the CSC or not, the reason being, as the evidence has clearly demonstrated, that:

a)	the CSC made a decision to create a position;
b)	there was financial approval;
c)	there was a determination of qualifications and standards in the newspaper advertisement;
d)	there was an advance screening of candidates and a selection process including interviews; and
e)	the selection of candidates was made in accordance with the merit principle.

[47]   The Warden took part in the decision to fill the position and had the delegated staffing authority from the PSC.

[48]   The grievors acknowledged that, although there was no formal instrument of appointment or oath of allegiance as contemplated in the PSEA, this is a technicality.   The CSC was seeking to circumvent the PSEA and the relevant collective agreement.

[49]   From the evidence, it is clear that there was and still is a need for the position of Sex Offender Co-Facilitator.   The grievors were the most qualified candidates and the work that they performed constituted an employee-employer relationship.   They were treated as employees by Mr. Cranwell in every way except for their benefits’ entitlement.   He supervised them, invited them to meetings and had them sign the Warden’s memorandum on “Compliance to the law and policy”.   They argued that this was not an independent contractor relationship.

[50]   Exhibit A-1, tab 9, is Mr. Cranwell’s justification for retaining the Sex Offender Co-Facilitator contract.   He stated: “The savings are quite spectacular.   In this document, it is shown that both facilitators are cheaper than one PO/CPO. . . .”   This demonstrates that the CSC did not want to pay the grievors the full compensation package under the collective agreement, therefore circumventing it.

[51]   Mr. Cranwell’s testimony speaks to the importance of a mandated program.   He ran a competition using the merit principle and selected the grievors as the suitable candidates.   The grievors were under his direct supervision.   There was money available to pay the grievors and their cheques were financially approved by Mr. Wallis.   Mr. Wallis acknowledged that Mr. Sawatsky declared that the grievors’ contract was null and void but Mr. Wallis continued to pay them.   The Warden knew about the need/obligation for the Sex Offender Program.   As well, he held delegated staffing authority.

[52]   The threshold question is whether the grievors are employees pursuant to the PSEA.   Section 10 of the PSEA states that appointments are to be based on merit, through a competition, and are made by persons who have delegated authority.   Mr. Cranwell used the merit principle in his selection process and the Warden had authority to appoint.

[53]   The grievors argued that the following paragraphs of the Treasury Board’s Contacting Policy (Exhibit A-1, tab 5) are relevant to this matter.   Contracting for services has traditionally been accepted as an effective way to meet unexpected fluctuations in the workload.

. . .

16.2   Contracting for the services of individuals and Public Service employment

16.2.1 . . . Factors that may create an employee-employer relationship include the degree of supervision; provision of working space and equipment; type of work (i.e. is the contractor doing the same work as employees); and basis of payment and benefits.

. . .

16.2.7   Contracting authorities cannot use contracts for services to circumvent the requirements of the statutory employment regime established by the Public Service Employment Act .   In other words, contracting authorities cannot sign contracts with individuals that would, in the absence of the Public Service employment regime, create employer-employee relationships according to the rules of the common law.

. . .

16.3   Employer-employee relationships

. . .

16.3.3    Appointment under the Public Service Employment Act .   In order to be appointed to a position under the Public Service Employment Act , (i.e. to be employed in the Public Service), there must be evidence of:

financial approval (classification) for the position by the Treasury Board or its delegate;

an administrative decision to make an appointment to a position;

a process of selection according to merit;

a process of personnel selection by competition or otherwise.

. . .

[54]   I was referred by the grievors to the following cases: 671122Ontario Ltd. v. Sagaz Industries, 2001 SCC 59; Bambrough v. Public Service Commission [1976] 2 F.C. 109 (C.A.); Canada (Attorney General) v. Brault, [1987] 2 S.C.R. 489; Doré v. Canada, [1987] 2 S.C.R. 503; Oriji v. Canada, 2002 FCT 1151; Public Service Alliance of Canada v. Treasury Board, PSSRB File Nos. 147-02-31 and 169-02-447 (1988) (QL); Re Rizzo & Rizzo Shoes Ltd., [1998] 1 S.C.R. 27; and Public Service Alliance of Canada v. Treasury Board (Indian and Northern Affairs Canada), 2002 PSSRB 31.

For the Employer

[55]   The employer argued that departments, agencies and separate employers contract for services.   The question here is a legal one: what is required for an appointment to be made pursuant to the PSEA?

[56]   The employer argued that there must be a specific appointment, a formal instrument of appointment.   The formal instrument of appointment is a control mechanism that identifies whether or not a person is an employee of the Public Service.   No evidence was adduced to prove that the CSC ever intended making the grievors employees of the Public Service.

[57]   The definition of employee found in subsection 2(1) of the former Act is very clear: “‘employee’ means a person employed in the Public Service. . . .”   This is a unique definition, defined by Parliament, and it must be given its just meaning.   Subsection 2(1) of the PSEA states that “‘employee’ means a person employed in that part of the Public Service to which the [PSC] has the exclusive right and authority to appoint persons. . . .”

[58]   Section 8 of the PSEA gives the PSC the authority to appoint.   It can be argued that, as well as merit being one of the most important factors under the PSEA, knowing who is and who is not an employee is also an important factor.

[59]   The Employment Insurance Act and the Canada Pension Plan have different definitions with regard to the term “employee”.   They must be taken in context; if Parliament had wanted to assign the same meaning to that word in all circumstances, it would have done so.

[60]   The employer further argued that the invoices that were signed and submitted by the grievors for payment stated: “Signed off by the Contractor”.   As well, the bargaining agent did not ask that union dues be remitted and the grievors did not file a grievance until their contract was terminated.

[61]   The employer referred me to the following cases: Panagopoulos v. Canada, [1990] F.C.J. No. 234 (T.D.) (QL); Canada (Attorney General) v. Public Service Alliance of Canada (supra); Syndicat général du cinéma et de la télévision v. Canada (National Film Board - NFB), [1972] F.C.J. No. 125 (C.A.) (QL); Canada (Attorney General) v. Gaboriault, [1992] 3 F.C. 566 (C.A.); Gariépy v. Canada, [1996] F.C.J. No. 191 (T.D.) (QL); Professional Association of Foreign Service Officers v. Treasury Board (Department of Foreign Affairs and International Trade), 2001 PSSRB 132; Public Service Alliance of Canada v. Treasury Board (Indian and Northern Affairs Canada) (supra); Farrell v. Canada, 2002 FCT 1271; Professional Association of Foreign Service Officers v. Canada (Attorney General), 2003 FCA 162; Rostrust Investments Inc. v. Canadian Union of Public Employees, 2005 PSSRB 1; Green-Davies v. Canada (Attorney General) 2005 BCSC 1321; Endicott v. Canada (Treasury Board), 2005 FC 253; and Ainsley Financial Corporation et al. v. Ontario Securities Commission et al. (1994), 21 O.R. (3d) 104.

Reasons

[62]   The parties agree that this case hinges on one threshold question: are the grievors employees for the purposes of the former Act or independent contractors?

[63]   The evidence presented by the parties in essence mirrored the contents of the Agreed Statement of Facts (Exhibit A-1, tab 1).

[64]   The grievors responded to a local newspaper advertisement placed by the GCI.   The CSC was seeking candidates with an undergraduate degree (BA, BSC) to fill two full-time term positions of Sex Offender Co-Facilitator to expire on March 31, 2001.   The grievors placed first and second in a selection process chaired by Mr. Cranwell.   On January 8, 2001, they began working at the GCI on the basis of contracts signed on January 12, 2001.   Subsequently, the grievors signed several contracts identical to the first ones, extending their contracts to July 1, 2003.  However, on April 30, 2003 they were informed through a letter from by Dave Castle, Regional Contracting Specialist, that the Crown wished to terminate their contracts as of May 9, 2003 (Exhibit A-1, tab 14).

[65]   The evidence has shown that the grievors signed these contracts.   The Articles of Agreement (contract) (Exhibits A-2, tab 1 and A-3, tab 1) states that Tanya Estwick and Amanda Quintilio are contractors.

[66]   Article A13 of the Articles of Agreement states:

A13

Contractor Status

13.1

This is a contract for the performance of a service and the Contractor is engaged under the contract as an independent contractor for the sole purpose of providing a service.   Neither the Contractor nor any of the Contractor’s personnel is engaged by the contract as an employee, servant or agent of Her Majesty.   The Contractor agrees to be solely responsible for any and all payments and/or deductions required to be made including those required for Canada or Quebec Pension Plans, Unemployment Insurance, Workmen’s Compensation or Income Tax.

[Emphasis added]

[67]   The grievors also acknowledged on January 12, 2001, pursuant to paragraph 23(1)(d) of the Income Tax Act, that they had “individual” contractor status.

[68]   The contracts which the grievors signed (Exhibit E-1) clearly stated that they understand that it is their responsibility to ensure that an employer/employee relationship does not develop/evolve over the life of the contract.

[69]   The Articles of Agreement (contract) (Exhibits A-2, tab 1 and A-3, tab 1) were signed by Mr. Cranwell as the Project Authority and by the grievors for the Contractors.   As well, all invoices signed and billed bi-weekly to the GCI by the grievors stated: “I certify I was present for the above noted hours.”

[70]   Messrs. Cranwell and Wallis and the Warden testified that at no time were offers of appointment made to the grievors, and this was not disputed by the grievors at the hearing.   Perhaps the grievors felt that they were treated as employees due to being invited to gatherings and by inadvertently receiving memoranda that were meant for indeterminate employees.   However, no evidence was put forward to show that they were ever offered indeterminate positions.   As well, in examining the contracts signed by the grievors, I am of the opinion that prior to Ms. Woo’s ruling they believed that they were contractors.   If they believed otherwise, surely they would have raised the matter prior to the termination of their contract.

[71]   I was not presented with any evidence that a formal offer of appointment was made by the Warden, and the evidence has clearly shown that he was the only one with delegated staffing authority to appoint a person to a position at the GCI.

[72]   In subsection 2(1) of the former Act, “employee” is defined as “. . . a person employed in the Public Service. . . .”   In the PSEA, “employee” is defined as “. . . a person employed in that part of the Public Service to which the [PSC] has the exclusive right and authority to appoint persons. . . .”   The PSC has the exclusive right and authority to appoint persons at the CSC, and the CSC is part of the Public Service.  

[73]   The authority to appoint, found at section 8 of the PSEA, states as follows:

  8. Except as provided in this Act, the [PSC] has the exclusive right and authority to make appointments to or from within the Public Service of persons for whose appointment there is no authority in or under any other act of Parliament.  

[Emphasis added]

[74]   Subsection 10(1) of the PSEA states as follows:

  10. (1)   Appointments to or from within the Public Service shall be based on selection according to merit, as determined by the [PSC] , and shall be made by the [PSC] , at the request of the deputy head concerned, by competition or by such other process of personnel selection designed to establish the merit of candidates as the [PSC] considers is in the best interests of the Public Service.

[75]   According to the evidence, Mr. Cranwell and the selection committee members selected the grievors from a total of three eligible candidates.   Although merit was used to select the grievors, the PSC was not involved in the process.

[76]   I am of the opinion that it is widely recognized and accepted that, before an appointment to a position in the Public Service can be made, the PSC must perform a priority check to ensure that there are no suitable candidates in its inventory.   The inventory may contain names of suitable candidates who are already employed in the Public Service but who have been laid off as a result of a workforce adjustment.   As well, in a competition process candidates have the right to file an appeal pursuant to section 21 of the PSEA.   There was no evidence that the PSC was involved, either before or after the grievors were hired.

[77]   In reviewing the case law provided by the parties, I note the judgement of the Federal Court of Appeal in Professional Association of Foreign Service Officers v. Canada (Attorney General) (supra) concerning the requirement for a legal structure for an appointment to the Public Service:

. . .

[14] The Board had to decide what is required for one to become an “employee” within the meaning of section 34 of the Public Service Staff Relations Act.   In the Econosult case at 634 Sopinka J. quoted with approval from the decision of this Court under appeal where Marceau J.A. stated:

There is quite simply no place in this legal structure for a public servant (that is, an employee of Her Majesty, a member of the Public Service) without a position created by the Treasury Board and without an appointment made by the Public Service Commission.

For this reason the Supreme Court found that there was “just no place for a species of de facto public servant who is neither fish nor fowl”. . . .

. . .

[Emphasis added]

[78]   It was not disputed that the Warden had the delegated authority to appoint candidates to a Co-Facilitator position in the Sex Offender Program.   Even though the employer agreed that the duties of a Sex Offender Co-Facilitator were similar to those of a Correctional Program Officer (WP-4), there was no evidence that the grievors were appointed to a position created by the Treasury Board.   No evidence was presented that either the CSC or the Treasury Board had established the position of Sex Offender Co-Facilitator by classification, group and level, position number or in an organizational chart depicting the reporting relationship.   Neither was there any evidence of intent, either verbally or in writing, that the Warden ever offered the grievors a position pursuant his delegated authority pursuant to the PSEA.

[79]   Section 22 of the PSEA, which governs hiring in the Public Service, states that an appointment takes effect on the date specified in the instrument of appointment.   There is no evidence that the grievors were given a formal instrument of appointment such as a letter of offer.

[80]   The grievors argued that the fact that there was no formal instrument of appointment was a mere technicality.   I do not agree with their proposition.

[81]   In Rostrust Investments Inc. v. Canadian Union of Public Employees (supra), the Board referred to the decision of the Supreme Court of Canada in Canada (Attorney General) v. Public Service Alliance of Canada (supra):

. . .

[21] In any event, since the decision of the Supreme Court of Canada . . . it has been clear that only employees appointed pursuant to the PSEA can be considered employees under the PSSRA:

21. …In the absence of a definition of “employee”, it could be argued that the Board could determine who is an employee on the basis of tests that are generally employed in labour matters.   These tests are customarily employed to resolve a dispute as to whether a person is an employee or an independent contractor.   The express definition of “employee”, however, shows a clear intention by Parliament that it has decided the category of employee over which the Board is to have jurisdiction.   It is restricted to persons employed in the Public Service and who are not covered by the Canada Labour Code .   The Board’s function… is not to determine who is an employee but rather whether employees who come within the definition provided, are included in a particular bargaining unit.

[…]

24. …A finding that they are employees of the Government of Canada simpliciter would clearly exceed the authority conferred by … [the Act ] and would fly in the face of s. 8 of the [Public Service] Employment Act which expressly reserves this power to the Public Service Commission.

25.      In the scheme of labour relations which I have outlined above there is just no place for a species of de facto public servant who is neither fish nor fowl…

[…]

27.      Those who are authorized to bring disputes before the Board are employees, employee organizations and employers as defined in the legislation which clearly confines the ambit of these disputes to the Public Service. . . .

. . .

[82]   The grievors were considered by the CRA to be employees under a contract of service for the purposes of the Employment Insurance Act and the Canada Pension Plan, as decided by Ms. Woo.   This ruling was in respect of EI and CPP deductions and not a ruling that they were employees of the Public Service.

[83]   Suffice it to say that the term of “employee” has a different meaning in different legislative schemes.   There are also various types of employees: term, FTE, part-time, seasonal, or indeterminate.   To make matters worse, as is the case here, departments hire persons on contract to fulfill a requirement for an extended period of time, contrary to the Treasury Board’s Contracting Policy.   That policy states that “[c]ontracting for services has traditionally been accepted as an effective way to meet unexpected fluctuations not workload. . . .”   The grievors were hired as contractors to fulfill the requirements of a program mandated to the CSC.   They performed the duties required for two-and-one-half years.   In such, it cost the CSC one-third less in salary than paying an indeterminate employee, which was a substantial saving according to Mr. Cranwell.   Although the grievors were integrated into the workplace, participated in social activities, took courses and at times reported to a supervisor, they remained contractors.   I do not believe that most people hired on contract understand government bookkeeping that separates O&M funds from salary funds.   As a result, they may feel that they are employees of the Public Service when in reality they are not.

[84]   For all of the above-noted reasons, I conclude that the grievors are not employees for the purpose of the former Act and therefore the grievances are dismissed for lack of jurisdiction.   I would like, however, to comment on two areas:

a)	The CSC was granted delegated staffing authority by the PSC.   I agree that it has the right to exercise that authority. However, I would point out that part of the PSC’s mandate is to monitor staffing practices and to review or revoke any delegated staffing authority when it is being abused;
b)	The Treasury Board should ensure that CSC and its employees are familiar with the Treasury Board’s Contracting Policy and its intent.

[85]   For all of the above reasons, I make the following order:

Order

[86]   The grievances are dismissed.

February 9, 2006.

D.R. Quigley,
adjudicator