FPSLREB Decisions

I. Individual grievance referred to adjudication and application before the Chairperson

1 The grievor and applicant, Johanne Prévost (“the grievor”), is presently Advisor, Regulatory Policy, to the Central Bank of Bahrain. In 2006, the Central Bank of Bahrain succeeded the Bahrain Monetary Agency, established in 1973 to carry out central banking and regulatory functions after Bahrain secured full independence from Great Britain. The Central Bank of Bahrain is responsible for maintaining the country´s monetary and financial stability and is the sole regulator of Bahrain's financial sector, including banking, insurance, investment business and capital markets activities.

2 As will be explained further in this decision, the grievor was previously employed as a manager of supervisory policy (Research Group) with the Office of the Superintendent of Financial Institutions (OSFI or “the employer”), classified RE-06. The Research Group is represented by the Professional Institute of the Public Service of Canada (“the Institute”).

3 On May 30, 2008, the grievor filed a grievance under clause 17.15(b) of the collective agreement negotiated between OSFI and the Institute (expiry date March 31, 2008) (“the collective agreement”). The grievor alleges that the OSFI has refused to extend the leave without pay that led her to accept her current position with the Central Bank of Bahrain. As corrective action, the grievor seeks the reinstatement of her leave without pay status retroactively to May 31, 2008 until May 31, 2012, including the restoration of her status as a contributor to the Public Service Pension Plan and all benefits and entitlements available to her as a federal public servant.

4 The employer objected to my jurisdiction to hear and decide this grievance, alleging that it is untimely since it was filed nine months after the employer´s definite refusal to extend the grievor´s leave without pay to May 31, 2012. The grievor replied that her grievance was not triggered until the pay period ending April 14, 2008, when the employer acted on its decision to not extend her leave without pay. In the alternative, the grievor has applied for an extension of time to file the grievance on the basis that she relied on the advice of the Institute and counsel to file the grievance when she did.

5 Pursuant to section 45 of the Public Service Labour Relations Act (PSLRA), the Chairperson has authorized me, in my capacity as Vice-Chairperson, to exercise his powers pursuant to paragraph 61(b) of the Public Service Labour Relations Board Regulations ("the Regulations") to hear and decide the matter relating to the extension of time.

6 Given that the facts concerning the merits of the grievance are closely related to the facts concerning the application for an extension of time, and to provide for an expeditious hearing, I decided to exercise my discretion under subsection 98(2) of the Regulations to consolidate the two matters.

II. Summary of the evidence

A. Grievor´s Testimony

7 The grievor has been employed by the federal public service since 1978. She has been employed by the OSFI since 1985. She holds a bachelor of administration degree, is a certified management accountant and has successfully completed training offered by the Ontario Securities Commission. In 1998, she was the successful candidate in a competition held by the OSFI for an appointment to the secretariat of the Basel Committee on Banking Supervision (“the Basel Committee”). Her secondment was for two years and was renewed for a further year, until 2001. The Basel Committee provides a forum for cooperation on banking supervisory matters to improve the quality of banking supervision worldwide and to promote a common understanding through the development of guidelines and supervisory standards, such as the Concordat on Cross-Border Banking Supervision.

8 The Basel Committee is composed of 27 members, including Canada. The Committee's secretariat is located at the Bank for International Settlements in Basel, Switzerland, and is staffed mainly by professional supervisors on temporary secondments from member institutions. In addition to undertaking the secretarial work for the Committee and its many expert subcommittees, the Secretariat stands ready to provide advice to supervisory authorities in all countries.

9 At the end of her secondment to the Basel Committee, the grievor learned that she would not be returned to her position in Ottawa, where she had worked before her secondment. She returned to Canada and was relocated to Toronto, in a newly created position without a job description, reporting to a manager in Ottawa. On her return to Toronto, through one of her professional contacts, she was made aware of an opening with the Toronto International Leadership Centre for Financial Sector Supervision (“the Toronto Centre”). The OSFI has a representative on the Board of Directors of the Toronto Centre and contributes in kind to its operations. The OSFI agreed that the grievor would be seconded as Director of the Toronto Centre as a means of fulfilling its “in kind” obligation in support of the Toronto Centre´s operations. During that period, the grievor received salary and benefits as if she were an OSFI employee. OSFI, in turn, billed the Toronto Centre for the grievor´s services. During her secondment to the Basel Committee and the Toronto Centre, the grievor paid no union dues.

10 Near the end of her secondment with the Toronto Centre, the grievor inquired about her return to the OSFI. After several delayed responses, she was informed on December 19, 2003, in a call with Gary Walker, Director of Human Resources at OSFI, that she would be declared surplus to requirements on her return to the OSFI. This was later confirmed in a letter to the grievor dated January 13, 2004. The grievor´s suggestions for alternate employment within the OSFI were not considered, and she was placed on a priority list. The grievor remained at home with pay but without any communications from the OSFI.

11 A surplus employee is an employee who has been advised by the deputy head that his or her services are no longer required. A surplus employee receives the benefits found in the Work Force Adjustment Directive, a policy negotiated between federal public sector unions and the Treasury Board. Among other benefits, a surplus employee acquires, before any layoff becomes effective, a guaranteed right to priority of appointment for one year to another position within the federal public service for which he or she meets the basic qualifications.

12 After being declared surplus, and to avoid her knowledge and skills lapsing in a very competitive area, the grievor actively searched for alternate employment, which led her to consider an international opportunity as an insurance supervision advisor with the Central Bank of Bahrain. This position involved moving herself and her family to the Kingdom of Bahrain for a two-year renewable appointment. As the acceptance of the position in Bahrain had an important impact on her surplus rights for continued employment within the federal public service, her pension rights and involved a considerable financial expenditure on her part to move her family to Bahrain, the grievor contacted OSFI prior to accepting the offer of employment to negotiate conditions of employment during her absence. A significant consideration in the negotiations, according to the grievor, was that OSFI would no longer have to assume the cost of her salary for the remaining seven months of her surplus status if she accepted the assignment in Bahrain. In return, she agreed to forego her right to a reasonable job offer under the Work Force Adjustment Directive, a right that accrued to her for a period of two years after her declaration of surplus status. On March 18, 2004, the Governor of the Bahrain Monetary Agency (as it was then called), wrote a letter to the President of the OSFI to request his support in granting the grievor´s leave of absence for a two-year renewable assignment. He invoked her high level of expertise as greatly beneficial to the Central Bank of Bahrain. No immediate answer was supplied.

13 To speed up negotiations with the OSFI, the grievor retained counsel to write a proposal, in which she proposed maintaining her pension and benefit rights during the assignment and any renewal of it. A formal exchange of correspondence was followed by an exchange of emails directly with the grievor and a letter on May 13, 2004, outlining the conditions of her secondment with respect to her pension and benefit rights. Initially, the grievor was to continue accumulating her pension and would be entitled to other benefits by making employee contributions as if she were an employee of the public service for two years with a possible one-year extension to May 31, 2007. After that, she would assume both the employee´s and employer´s shares of the contributions for a further five years. The grievor was to inform the OSFI in writing of her intentions at least three months before her assignment in Bahrain ended. No formal document was executed about those conditions.

14 On May 30, 2007, the grievor wrote to Colette Demers, a pay and benefits advisor, informing her that, as a follow-up to an earlier letter of May 19, 2007, her assignment with the Central Bank of Bahrain was being extended to May 25, 2008 and requested that OSFI inform her of the contributions required to maintain her pension health, dental and disability benefits for that period.

15 On June 3, 2007, Ms. Demers wrote to the grievor, outlining in considerable detail her options and financial responsibilities with respect to her leave without pay, pension options, repayment options, insurance and medical benefits. The letter states that her leave without pay would be extended to May 25, 2008.

16 On June 8, 2007, Denis Leroux, Director of Human Resources wrote to the grievor, informing her that her leave without pay would be extended until May 25, 2008, and that, after that, she would no longer be an employee of the OSFI. The letter stated further that she would no longer have priority status after May 25, 2009. The letter requested that the grievor inform OSFI when she would be available for employment so that the Public Service Commission could be informed of her priority status.

17 On June 15, 2007, the grievor emailed Jocelyne Charette, a human resources coordinator, requesting clarification about the continuation of her benefits during her leave without pay. Ms. Charette replied on June 20, 2007 with the requested clarifications and noted that the grievor´s request for a further extension of her leave without pay had been sent to management for approval. Ms. Charette replied that she saw nothing in the grievor´s file that allowed her to extend her leave without pay beyond May 25, 2008. The grievor replied to Ms. Charette by citing extracts from letters from Mr. Walker and Michel Poirier that outlined what her benefits would be were she to extend her leave without pay.

18 Ms. Charette replied to the grievor, stating that the references to five years with respect to leave without pay were meant to outline the maximum period allowed under the employer´s policy. However, in the grievor´s case, only two years plus a one-year extension had been granted, and the OSFI was unwilling to consider an additional period of leave without pay. On August 19, 2007, the grievor wrote to Ms. Demers about her leave without pay, seeking clarification about payment options and the final date of the extension period and medical benefits, and requesting a copy of the new collective agreement.

19 In an undated email to the grievor, apparently sent in October 2007, Ms. Charette outlined the terms for the recovery of contributions to the pension plan and confirmed that the OSFI was not prepared to consider a further renewal of her leave without pay. The grievor followed up on Ms. Charette´s letter by telephoning Bob Hanna, Director of Corporate Services, followed by an email outlining her concerns and understanding of her leave without pay arrangement with the OSFI. She outlined her work and how it could be of use to the OSFI. She asked what criteria were being used to establish whether further leave requests would be granted. On November 20, 2007, Mr. Leroux responded to the grievor´s email to Mr. Hanna. He explained the OSFI´s refusal to extend her leave without pay on the basis that she had been absent from the OSFI since November 13, 1998, that her continued absence was not beneficial to the OSFI, that her work was not in the “service of Canadians” and that the only merit of extending her leave without pay would be to increase her pension at retirement, a burden not to be foisted on pension plan contributors.

20 On March 12, 2008, the grievor wrote to Mr. Leroux, formally requesting leave without pay as per clause 17.15(b) of the collective agreement. In her letter, she outlined the circumstances that had led her to take on the assignments in Basel and with the Toronto Centre as well as how she had undertaken the work in Bahrain. She outlined how her acceptance of that work had been financially advantageous to the OSFI since she had agreed to end her surplus status as of May 31, 2005. She stated that the understanding of all parties was that there would be a five-year extension of her leave without pay after the initial three-year period, provided that she paid both the employer and employee pension contributions.

21 On April 14, 2008, Mr. Leroux responded to the grievor´s letter, stating that clause 17.15 of the collective agreement provided that leave without pay was at the employer´s discretion and reiterating that, in her case, the disadvantages (cost and ongoing liability) outweighed the advantages for the OSFI. He reiterated the OSFI´s position. On May 14, 2008, Mr. Leroux responded to the grievor´s email containing the severance and pension questions. On May 15, 2008, Steve Eadie of the Institute requested an extension of time to file a grievance to allow for the full discussion of the different settlement options available to the grievor. The employer did not agree to extend the time to file a grievance because of its firm position that the OSFI would not grant the grievor´s leave without pay for a further five years. On May 30, 2008, the grievor filed this grievance.

22 The grievor testified that, in June 2007, she realized that she and the employer did not have a common understanding as to what had been agreed about the conditions of her leave without pay. She had understood that, as long as she advised the OSFI before the end of her term that her assignment with the Central Bank of Bahrain was being renewed, her leave without pay would be extended, but with different conditions after three years, which were that she would be responsible for the employee´s and the employer´s shares of the pension and other benefit plans she chose to continue. Her belief was also based on the precedent previously set by Gilles Hubert, another employee who had obtained a six-year leave of absence, which Mr. Walker noted in his email of May 7, 2004.

23 The grievor stated that it was on the basis of her understanding that her benefits could continue beyond the initial two-year period of her contract with the Central Bank of Bahrain that she accepted the assignment. She admitted that she could have come back to Canada in 2007, but she would have been on a priority list, without salary, and would have had to wait for an appointment.

24 When Ms. Charette informed the grievor that the OSFI was not prepared to extend her leave without pay, the grievor inquired about the criteria, with the intention of contesting the OSFI´s decision. When the OSFI did not change its position about extending her leave without pay, she contacted friends to obtain the name of counsel in Canada to inquire about her rights. That took a while because of the time difference between the Middle East and Canada associated with making telephone calls, and she did not have a personal email account at home. In January 2008, she secured the name of a counsel in Ottawa who specialized in employment matters.  He responded to her inquiries in March 2008 and her counsel told her that she had until the end of the extension period to file a grievance and that she was entitled to union representation. The grievor testified that she did not realize that she was entitled to union representation as it had been several years since she had paid union dues. When she contacted the Institute, she was told that she was indeed entitled to union representation and that she had until the end of the extension period (May 25, 2008) to file a grievance. The grievor relied on those opinions when she filed her grievance.

B. Gary Walker´s Testimony

25 Mr. Walker is Assistant Superintendent of Corporate Services. He was Senior Director of Human Resources and Administration at the time of the incidents giving rise to the grievance. He explained that the OSFI is the primary regulator of the financial services industry and that it protects clients, policy holders of banks and insurance companies, and privately regulated pension plans.

26 In certain circumstances, OSFI employees can be assigned to other institutions in which the OSFI is an active member, such as the Basel Committee or the Toronto Centre, where the OSFI contributes in kind. Selections are made through internal competitions and appointments are usually for two years with a one-year extension. The OSFI has no secondment arrangement with the Central Bank of Bahrain.

27 When the grievor contacted the OSFI about an assignment with the Central Bank of Bahrain, she had surplus employee status. The OSFI´s initial assessment of the request for leave without pay was based on the following factors: whether the assignment represented a benefit for the OSFI, and whether the grievor would return to the workplace with experience beneficial to the OSFI. Mr. Walker was prepared to grant leave without pay because the grievor was a long-service employee, the request was for two to three years and that time would allow the OSFI to find her a position. Mr. Walker´s initial proposal was for the grievor to pay both contributions (employee and employer) for her pension and medical benefits. The pension was a significant issue for the OSFI. When the grievor identified a precedent (Mr. Hubert), the decision was made to grant her leave without pay and to have her contribute only the employee portion of the benefits.

28 In his discussions with the grievor, Mr. Walker recalled that the intent was to allow her to accumulate pension benefits until her earliest retirement date. Mr. Walker was concerned that the grievor had already been on surplus status for four months before accepting the position in Bahrain and that she wished to retain employment status should she return to the OSFI at the end of her assignment. Mr. Walker testified that the letter of May 13, 2004 outlined the following terms. For the duration of the leave and for up to a one-year extension, her pension and benefits contribution would be at the single rate. If she returned to the OSFI within the first year, she would retain her surplus status. If she returned after one year, she would lose her salaried surplus status but would retain her employment priority status for a period of one year, and after that she would cease to be an employee. If she extended her leave without pay beyond May 31, 2007, she would pay the double rate of contributions for her pension and benefits, but that was not, according to Mr. Walker, an agreement to extend the grievor´s leave without pay beyond three years.

29 Responding to a question from the grievor´s counsel as to what he meant in his May 13, 2004 letter by “Should you wish to extend your leave beyond May 31, 2007…” Mr. Walker replied that, in hindsight, the letter could have been clearer; its intent was to clarify the grievor´s level of contributions after the initial three-year period. Mr. Walker stated that his greatest concern was that there would be no misunderstanding about the contribution levels during any period of leave without pay. On that point, he consulted Mr. Poirier, who was the head of the pay and benefits group at that time. Mr. Poirier responded to questions from the grievor about the level of contributions on Mr. Walker´s behalf on May 19, 2004. Mr. Walker testified that he, not Mr. Poirier, had the authority to grant a leave of absence without pay to the grievor. However, Mr. Leroux had conduct of the grievor´s file for the purposes of her inquiries.

30 In cross-examination, Mr. Walker admitted that the grievor had received only five months of pay and benefits as a surplus employee. Mr. Walker was unwilling to admit that the OSFI had saved seven months of the grievor´s salary when it agreed to allow her to take leave without pay for the Central Bank of Bahrain assignment. However, Mr. Walker admitted that the grievor had not received a job offer during the first five months she was in surplus status and that no job offer had been forthcoming when she accepted employment with the Central Bank of Bahrain.

C. Denis Leroux´s Testimony

31 Mr. Leroux was the director of human resources and administration at the time of the incidents that led to the grievance. Mr. Leroux signed the letter dated June 8, 2007 to the grievor extending her leave without pay for one year until May 25, 2008. To correct an administrative error, the date of May 25, 2008 was eventually modified to May 30, 2008.

32  Mr. Leroux testified that the grievor´s leave without pay was extended for only one year because, in his opinion, her work would have been of no benefit to the OSFI or to Canada once she returned from the Central Bank of Bahrain. Other employees had not been given such extensions. The letter mentions that the grievor would no longer be an employee after three years because he wanted to clarify that the OSFI would not entertain any additional requests for leave without pay after that time. Mr. Leroux was not persuaded by any of the grievor´s arguments in her letter of March 12, 2008 to change his decision to not extend her leave without pay for a further five years. He also made the decision to not grant the Institute´s request to extend the date for filing a grievance based on advice he received from Michelle Laframboise, an OSFI human resources manager.

33 In cross-examination, Mr. Leroux stated that, for his response to the grievor on November 20, 2007 refusing to extend her leave without pay, he considered the administrative burden of continuing to deal with her request. He admitted that the burden was the paperwork and that he had not figured out the financial cost. The ongoing liability referred to the increase in the grievor´s pension benefits for the Government of Canada while she was on leave without pay. Mr. Leroux admitted not calculating the additional cost to the Government of Canada or researching the effect of the grievor assuming the employer´s contribution toward her pension benefit. Mr. Leroux admitted not taking into account the fact that the grievor had given up seven months of pay as a surplus employee when she accepted employment with the Central Bank of Bahrain. Mr. Leroux said that he was not persuaded by the precedent of Mr. Hubert, as requests for leave without pay are considered on a case-by-case basis. Mr. Leroux´s main consideration in not granting the grievor an extension of her leave without pay was the length of time she would have been on leave without pay and not whether the assignments were under the auspices of the OSFI.

III. Summary of the arguments

A. For the grievor

1. On the timeliness of the grievance and the merits of the application for extension

34 The grievor submits that the triggering date for the grievance was May 30, 2008, the date on which the employer´s refusal to extend her leave without pay took effect, as that is the date on which the collective agreement was breached. The grievor did not have to anticipate that there would be a breach; her rights were violated when the breach actually occurred, that is, when the employer refused to extend her leave without pay. In support of her position, the grievor cites Ontario Public Service Employees Union v. Sault College (Piotrowski Grievance), [2006] O.L.A.A. No. 568 (QL).

35 Although the grievor maintains that her grievance was timely, out of an abundance of caution, she applied for an extension of time. The grievor explains that, if there was a delay in filing her grievance, it was because she was acting on the advice of counsel and her union, and she should not be penalized for following their advice. In support of her position, the grievor cites Jarry and Antonopoulos v. Treasury Board (Department of Justice), 2009 PSLRB 11.

36 The grievor further argues that, on May 15, 2008, the Institute requested an extension of the time lines to file the grievance, which the employer simply denied. This caused an additional delay in filing the grievance.

37 The grievor states that there are several possible triggering dates for her grievance. The first is the letter of June 8, 2007, which granted an extension of her leave without pay to May 25, 2008, at which time she was to cease being an employee of the OSFI. The employer´s evidence is that its intention in the letter was to make it clear to the grievor that no further extensions would be granted, an intention reflected in internal emails which were not copied to the grievor. However, that intention is not clearly stated in the letter of June 8, 2007. Therefore, it cannot be the triggering date.

38 The second is an email dated June 25, 2007, sent by Ms. Charette, stating that the OSFI had granted leave without pay for two years plus an extension but that it would not entertain an additional period in the grievor´s case, without providing any reasons. The grievor argues that this email cannot be the triggering event for the grievance because she had not yet requested leave beyond May 30, 2008 and because she did not know at that time whether she would continue to be employed by the Central Bank of Bahrain.

39 The third is an email dated October 25, 2007, that responds to a letter from the grievor dated August 19, 2007, and that grants her an extension for one year, but refuses further extensions. In the email, the employer responds to the grievor´s inquiry about an extension to May 30, 2008. The grievor argues that she did not understand this to be a final decision since she had not yet requested an extension beyond May 30, 2008. Therefore, this cannot be the triggering date.

40 The fourth is an email dated October 5, 2007, responding to among other things the grievor´s inquiry about the criteria for granting leave without pay for secondment to an international organization or for personal reasons. In the email, the OSFI refuses any further extension of the grievor´s leave without pay. The grievor argues that this email cannot be the triggering date since she had not yet set out the reasons for her request to extend her leave without pay for a further five years.

41 The fifth is an email dated November 19, 2007, (received by the grievor on November 20, 2007, because of the time difference) from Mr. Leroux to the grievor setting out why an extension of her leave without pay for a further five years was being denied.

42 The sixth is a letter from Mr. Leroux to the grievor dated April 14, 2008, setting out in greater detail why the grievor´s request for an extension of leave without pay was being denied under clause 17.15(b) of the collective agreement. The grievor argues that that was a fresh exercise of the employer´s discretion, which considered all the factors that arose in earlier correspondence and that raised new factors. The grievor argues that her grievance crystallized over time and that April 14, 2008, could constitute a date, other than May 30, 2008, which triggered her grievance. If April 14, 2008, is used, then the grievance was at best seven or eight days late. Based on the adjudicator´s reasoning in Guittard v. Staff of the Non-Public Funds, Canadian Forces, 2002 PSSRB 18, the extension should be granted. Furthermore, the Institute requested an extension of the delay within 25 working days of April 14, 2008. That very short period permits the Public Service Labour Relations Board (PSLRB) to exercise its discretion.

43 The grievor states that she was as diligent as the circumstances permitted. She communicated with the employer between June 2007, and May 2008. She sought legal advice and retained counsel in early January 2008. Through no fault of her own, counsel did not reply until early March 2008. The advice that she received was that she was still covered by the collective agreement and that she could avail herself of union representation, which she did. The grievor explained that she did not immediately contact the Institute in November 2007, because she had not been a union member since 1998 due to her several assignments outside the bargaining unit. It did not occur to her to contact the Institute until she was so advised by her counsel.

44 The grievor argues that she was unable to obtain legal advice quickly after November 20, 2007, because she was not in Canada and did know of counsel who could represent her. The counsel that she had employed when negotiating the terms of her employment with the Central Bank of Bahrain was no longer with the law firm. She had to find someone else, and therefore she inquired among her contacts in Canada as to who would be appropriate to represent her. This was done by email, and it took some time to receive any responses. Under the circumstances, the grievor argues that she acted diligently.

45 The grievor further argues that the employer did not lead any evidence on any prejudice that it might suffer should the application to extend the time to file the grievance be allowed. In this case, the merits were heard contemporaneously with the objection to timeliness, and the employer was able to defend the grievance without the loss of witnesses or having to deal with fading memories. The grievor also points out that it took the employer until November 5, 2008, to respond to her grievance dated May 30, 2008, and states that that is well beyond the 20 days provided to reply in clause 29.10 of the collective agreement.

46 The grievor requests that I exercise my discretion and that I grant an extension of time.

2. On the merits of the grievance

47 The grievor relies on the doctrine of estoppel when she acted as she did. The grievor argues that the employer made representations to her on four occasions, before she accepted employment in Bahrain, that she could expect her leave without pay to be extended beyond May 30, 2007: on April 29, 2004, in a letter from Donna Pasteris to the grievor´s counsel, Ann-Julie Auclair, stating that the grievor could renew her leave without pay beyond two years; on May 7, 2004, in an email from Mr. Walker, which left the question of renewal open-ended; on May 13, 2004, in a letter from Mr. Walker, which refers broadly to extending the grievor´s leave beyond May 31, 2007; and on May 19, 2004, in a letter from Mr. Poirier, which states the maximum contributions to the pension plan and distinguishes the first three years of leave without pay from the consequences of a further five-year extension.

48 The grievor argues that there is more. OSFI internal emails that she did not receive show that the issue of extending the grievor´s leave without pay was vague and that the employer´s intention should have been more precise as it could have given rise to expectations on her part. On several occasions, the employer sent the grievor information about her share of contributions to the pension plan and to other benefits should her leave without pay to extend beyond May 30, 2008. Ms. Demers´ letter of June 8, 2007, does not mention that the grievor´s leave would not be extended beyond May 30, 2008.

49 The grievor argues that, in this case, the exchange of correspondence was an unequivocal representation to her. The employer knew that she was seriously considering an offer of employment from the Central Bank of Bahrain and that she was prepared to give up her surplus rights if the conditions of her leave without pay were favourable. Mr. Walker recognized as much in his email dated May 7, 2004. Mr. Walker admitted in his testimony that, in hindsight, his letter of May 13, 2004 could have been clearer. The grievor could not have been expected to guess Mr. Walker´s intentions. The initial exchange of correspondence referred to an extension beyond two years and did not state that there would be a cap. The employer knew that the grievor would be making an important decision on the basis of its representations.

50 The grievor argues that there was detrimental reliance on her part. She moved to Bahrain only after she received the employer´s representations on May 19, 2004. Her detrimental reliance is that she paid her moving expenses to accept the position in Bahrain. Had she not been reassured that she could request an extension of her leave, she would not have accepted the position in Bahrain. More importantly, she gave up her surplus rights, representing a savings of seven months of salary for the OSFI and her right to a reasonable job offer.

51 The grievor argues that the employer failed to exercise its discretion, as stated in the narrative part of the grievance. As stated in Dubé and Piton v. Treasury Board (Department of National Defence), 2007 PSLRB 77, the courts have given adjudicators the authority to assess an employer´s exercise of its discretionary authority.  Invoking the employer´s failure to exercise its discretionary authority at adjudication does not change the nature of the grievance.  There is no Burchill v. Attorney General of Canada, [1981] 1 F.C. 109, argument, since the employer referred to that authority in its response to the grievance.

52 In Kawartha Pine Ridge District School Board v. E.T.F.O., (2005) 80 C.L.A.S. 70, the adjudicator decided that an employer´s discretion to grant leave must be exercised reasonably and that it must consider the merits of the request and all the relevant facts and not merely base its discretion on a rigid adherence to policy.

53 In this case, the grievor argues that the employer made its decision to deny the extension of her leave without pay based on the following four irrelevant considerations: the financial cost, its ongoing liability with respect to the grievor´s pension account, her previous appointments outside the OSFI and the benefit of the leave. The employer was unable to explain why or how those considerations justified denying the leave. On the other hand, the employer failed to take into account the following four very relevant considerations: the representations it made to the grievor in its exchange of correspondence with her, how another the OSFI employee had been treated in similar circumstances, the financial benefit the grievor had provided to OSFI by waiving her surplus employee rights and the intangible benefits offered by the grievor by continuing her employment with the Central Bank of Bahrain.

54 The grievor argues that, in this case, the employer did not properly consider the importance of the requested extension of leave without pay and that the grievance should be allowed.

B. For the employer

1. On the timeliness of the grievance and the application for extension of time

55 The employer argues that the grievance does not refer to estoppel but to a refusal to grant the grievor her requested leave without pay. The employer´s witnesses came prepared to answer questions about the promises it made to the grievor when she requested the leave, not to answer questions about whether they had reasonably exercised their discretion.

56 The employer argues that the grievance is untimely because it was not filed within the 25 days provided in clause 29.08 of the collective agreement. The employer states that the prescribed time to file a grievance started when the grievor was first informed of its refusal to extend her leave and not when she was affected by the prejudice of the refusal. The formal denial of leave was not made on May 30, 2008, but several months earlier. In Mark v. Canadian Food Inspection Agency, 2007 PSLRB 34, it was held that an employer´s decision in writing is sufficient to trigger the prescribed time to file a grievance. The employer submits that the extension of the grievor´s leave without pay was first denied on June 20, 2007, and that, therefore, the time in which to file a grievance began on that date. The employer submits further that the grievor knew at that time that her leave without pay was being refused but that she did not file a grievance. She did not contact the Institute or a lawyer; nor did she contact the employer about filing a grievance.

57 The employer submits that, once the grievor knew that her leave without pay would not be extended for more than a year, she had a final decision on which to grieve. She did not request an extension to file a grievance but continued to correspond with Mr. Leroux. The employer again refused her request on October 5, 2007, yet the grievor did not file a grievance. Being in Bahrain did not prevent her from making contacts by fax, telephone or email. She assumed at that time that she could not file a grievance and did not contact a lawyer until January 2008. For that neglect, she must assume the consequences.

58 On November 19, 2007, Mr. Leroux denied her request once more and provided reasons. The grievor argued that this was not the triggering event, yet it is the point at which she tried to obtain counsel.

59 Even if April 14, 2008, is taken as the date of the employer´s full refusal of the grievor´s request to extend her leave without pay, the grievance is still untimely. The grievance should have been filed by May 19, 2008, but was filed on May 30, 2008. The fact that the Institute requested an extension of time on May 18, 2008 is not relevant, as it does not extend the time limit to file the grievance. The grievance is more than nine months late. This is a case which the adjudicator should not exercise her discretion.

60 The employer argues that previous decisions of the PSLRB and its predecessor consistently support its position. In Grouchy v. Deputy Head (Department of Fisheries and Oceans), 2009 PSLRB 92, the adjudicator refused to extend the time limit by 43 days because the grievor had not demonstrated that he could not read and comprehend the provisions of the Regulations with respect to time limits to refer a grievance to adjudication. In Lagacé v. Treasury Board (Immigration and Refugee Board), 2011 PSLRB 68, the adjudicator refused to extend the time limit to file a grievance, after a seven-month delay, despite the grievor´s serious mental health issues.

61 In this case, the grievor´s reasons for not filing a timely grievance were that because she was far away, in Bahrain, and that she thought that she was not covered by a collective agreement. She did not set out a cogent reason that she ignored her rights. Requesting a copy of the new collective agreement is not a reasonable explanation for the delay in filing a grievance. When she received the collective agreement, she could have read it to determine the time limit. Thus, the grievor showed no diligence or any compelling reason to extend the time limit. The questions she asked in emails after June 20, 2007 did not extend the time limits to file a grievance; nor did the time she took to contact her counsel and get his opinion. Trying to resolve matters informally does not extend the time limit for filing a grievance.

62 The employer questions the reliability of the advice that the grievor received when she contacted her counsel.  As her counsel was not called as a witness, the employer was unable to test that advice. The grievor did not call Mr. Eadie, the Institute´s representative, as a witness to testify as to the advice that he gave her. The employer argues that the grievor´s explanations are very vague and that I should assign a negative inference to that part of her testimony. The employer relies on Vidlak v. Treasury Board (Canadian International Development Agency), 2006 PSLRB 96, Featherston v. Deputy Head (Canada School of Public Service) and Deputy Head (Public Service Commission), 2010 PSLRB 72, and Dumas v. Staff of the Non-Public Funds, Canadian Forces, 2007 PSLRB 74, in support of its position that it is not responsible for errors or bad advice from the grievor´s counsel. Based on Lagacé, filing a grievance requires little effort and can be done by any representative. The grievor´s reasons for requesting an extension of time are no more compelling than those in Lagacé, in which the application for an extension of time was denied.

63 In summary, the employer argues that, given the correspondence exchanged between the employer and the grievor, nine months was an unreasonable period to file a grievance. The employer submits that it is always an easy argument to make that there is no prejudice to the employer. However, the employer has the right to consider that a dispute has ended. Other than the serious effect on the grievor´s pension benefits, the employer sees no serious prejudice that excused her from filing a grievance in a timely fashion.

2. On the merits of the grievance

64 The employer takes the position that aside from the issue of timeliness, the grievance was also without merit. The employer argues that it has sole discretion to grant leave. In this case, it decided to not grant the leave without pay. Discretion is not defined anywhere, and there are no criteria defining it in the collective agreement. In this case, the grievor had the burden of proving that the employer made a representation to her by words or conduct, within the terms of the collective agreement, and that she relied on that representation to change her position to her detriment.

65 The employer argues that only the parties to the collective agreement can be affected by estoppel, that is, the employer and the Institute. Mr. Poirier had no authority on behalf of the employer to apply the collective agreement. Only Mr. Walker and Mr. Leroux had that authority. A representation to the grievor cannot be based on an email from Mr. Poirier.

66 The other party to the collective agreement is the Institute and not the grievor. This grievance is about the application of the collective agreement, and therefore, the representations could have been made only to the Institute. The employer submits that no promise was made specifically to the grievor. On May 13, 2004, it made an offer of a two-year leave without pay plus a one-year extension, and included discussions about the pension plan. Neither Mr. Walker nor Mr. Leroux ever represented to the grievor that they would approve further requests for leave without pay or any other leave under the collective agreement. A promise exists only if it is unambiguous. An ambiguity for the grievor does not constitute an explicit or implicit promise from the employer. On that point, the employer cites Pronovost v. Treasury Board (Department of Human Resources and Skills Development), 2007 PSLRB 93, and Dubé v. Canada (Attorney General), 2006 FC 796.

67 The employer argues that, in its letter of May 19, 2004, it only discussed terms for pensionable years; it did not imply that it would extend the grievor´s leave without pay indefinitely. The employer´s information did not constitute a promise that it would not rely on the collective agreement to exercise its discretion to extend the leave. A misunderstanding by the grievor is not a compelling promise from the employer. The employer submits that Mr. Walker testified that the practice is to grant leave without pay for a two-year period with a possible one-year extension. That rule was applied to the grievor. The employer argues that its letter to Ms. Auclair was a letter, not a promise, and that it was about the pension issue.

68 The employer argues that, before leaving for Bahrain, the grievor should have had a complete agreement in writing. She was careless to rely only on an exchange of letters. She has extracted from each letter those portions favourable to her point of view. Furthermore, if the grievor was so sure that her leave without pay would be extended, why did she request the leave rather than informing the employer of her intention of extending it. The grievor´s position that the employer had approved an extension of the leave in 2004 is inconsistent with her request in 2007 that the employer inform her of the criteria for granting that leave. That, the employer argues, contradicts any estoppel argument.

69 The employer argues that the grievor was foolhardy to accept a job in Bahrain and to move her family there, knowing that her job might not be extended beyond two years. That the employer granted her leave without pay beyond the initial two‑year period was but one of the criteria that the grievor admitted influenced her decision to accept the job in Bahrain. If continuing to contribute to her pension until 2012 was so important to her, the grievor had the option of maintaining her status as a surplus employee and being placed on a Public Service Commission priority hiring list. By accepting an extension of her contract in Bahrain, the grievor accepted the risk that her leave without pay would not be renewed. Her decision did not oblige the employer to correspondingly agree to extend her leave without pay. As in Chafe et al. v. Treasury Board (Department of Fisheries and Oceans), 2010 PSLRB 112, there is no evidence that the employer agreed to the renewal terms that the grievor argued at adjudication.

70 The employer submits that the grievor´s surplus status is a non-issue as she had a salary guarantee for only one year from the date on which she was declared surplus. By accepting a two-year contract, she was better off. The employer was generous when it agreed that, if the grievor did not like her assignment in Bahrain during the first year, she could return to Canada, and it would extend her surplus status for the period she had been away. The employer argues that the grievor did not give up her surplus status. Her hiring priority with the Public Service Commission was extended until May 31, 2005. Her priority status was not related to any obligation on the employer to extend her leave without pay beyond 2007.

71 The employer argues that the grievor has changed the grounds of her grievance.  The issue before me is estoppel and not discretion, which is why Burchill applies. A different kind of evidence applies to a discretion argument, which the grievor did not raise until adjudication. On the issue of discretion, the employer argues that Achakji v. Treasury Board (Transport Canada), PSSRB File No. 166-02-25895 (19950127) is a relevant precedent. In that case, the adjudicator upheld the employer´s decision to not grant discretionary leave.

72 The employer argues that its costs to grant more leave without pay to the grievor were administrative and were related to the pension plan. The Government of Canada incurs a cost when an employee is allowed to increase his or her pensionable years. The ongoing liability included the increase to the grievor´s pension entitlements because of additional contributions to the pension fund as well as her continuing right to file a grievance as long as she remained a federal public service employee.

73 The employer argues that Mr. Leroux was entitled to take into account the total of the grievor´s time away from the OSFI, including her assignments to the Basel Committee and the Toronto Centre. These assignments were different types of leave but were leave without pay nonetheless, which was relevant to the factor of the likelihood of the grievor coming back as an OSFI employee at the end of her assignment in Bahrain, and any further benefit to the OSFI if she continued to work in Bahrain. The reports the grievor offered to provide to the OSFI were of little benefit to justify granting a further five years of leave without pay.

74 The employer submits that Mr. Leroux considered emails from Mr. Poirier and Mr. Walker but that they did not change his decision to not grant the grievor leave without pay beyond May 30, 2008. The employer states that it distinguished the case of Mr. Hubert from that of the grievor as Mr. Hubert´s assignment during his six‑year leave of absence was to the OSFI´s advantage. The grievor has wrongly inferred that the precedent of Mr. Hubert should apply to her. Her continued assignment in Bahrain was of no benefit to the OSFI, which was an important consideration in the employer´s decision to refuse to extend her leave without pay.

75 The employer argues that it applied proper discretion and that its decision to not extend the grievor´s leave without pay was not arbitrary, malicious or discriminatory but was based on legitimate considerations. The employer requests that I dismiss both the application and the grievance.

C. Grievor´s reply

76 The grievor replies that Mark and Vidlak are distinguishable because they were decided under very different circumstances. In Mark, the grievor had already taken the leave when he applied later to have it recognized as sick leave. Vidlak was decided on the basis of written submissions, and the grievor´s evidence was not heard as it has been in this case. Oral testimony is sufficient to meet the grievor´s burden of proof.

77 The grievor replies that she takes issue with the employer´s interpretation that estoppel can only be between the employer and the Institute or that Mr. Poirier could not speak on behalf of the employer. Mr. Walker approved Mr. Poirier´s email to the grievor, and both spoke on behalf of the OSFI. The grievor cites Ontario (Ministry of Labour) v. O.P.S.E.U. (Sutherland), (2008), 179 L.A.C. (4th) 387, in support of her position.

78 This matter is not about a subversion of the collective agreement in which an individual employee concludes an agreement with the employer that contravenes the collective agreement. The requested leave was consistent with the collective agreement. No labour relations policy reason leads to the conclusion that the representations made to the grievor undermined the bargaining relationship.

79 In response to the employer´s argument that the grievor ought to have sought clarification in 2004 about its position, the grievor takes the position that the employer´s representations were clear and that they did not require further clarification at that time. Only after the employer changed its position did the grievor request the reasons for the refusal.

80 In response to the employer´s argument that the grievor requested an extension of her leave without pay rather than simply informing the employer, she argues that she advised the employer as follows on May 30, 2007 of her intention to extend her leave without pay beyond May 31, 2007: “… this is to notify you of my intention …”

81 The grievor denies that she would receive additional benefits as argued by the employer as she had agreed to pay both the employer´s and the employee´s contributions for the five remaining years, up to 2012. There is no additional cost to the employer since the grievor would make both contributions.

82 Finally, the grievor replies that Mr. Leroux did not seriously consider the precedent set by Mr. Hubert. His decision was arbitrary.

IV. Reasons

A. Whether the grievance is timely

83 The employer has objected to my jurisdiction to hear and decide this grievance, on the basis that it is was untimely.  The employer has argued that the grievance was filed nine months after what the employer characterizes as a “definite refusal” to grant the grievor any further extensions on June 25, 2007.  The grievor, on the other hand, has argued that the time limits began in April 2008, once her employer acted on its decision. On this point, the grievor relied on the advice she received from her counsel and the Institute. These arguments raise the issue of the date on which the grievance crystallized.

84 There is jurisprudence of the Public Service Staff Relations Board, the predecessor of the present Board, on the issue crystallization which supports the advice given to the grievor by legal counsel and her union. 

85 However, the newer tendency expressed by the current Public Service Labour Relations Board (PSLRB) is not so technical on such issues and permits grievances to be filed in cases where the employer has definitively announced a point of view.  For example, in the relatively recent case of IBEW v. Treasury Board (Department of National Defence), 2008 PSLRB 36, the grievors contested the fact that the employer had instructed three of them via email to work evening and night shifts for sea trials to come, in violation of their collective agreement.  The employer objected to the jurisdiction of an adjudicator to hear the grievance, arguing that no employee was aggrieved until they were forced to report for their shift.  The adjudicator rejected the prematurity argument of the employer and found that he did have jurisdiction.  In Sweiger v. Treasury Board (Department of the Environment), 2011 PSLRB 44, the collective agreement provided that “[a]n employee designated…for standby duty shall…be available to return to work as quickly as possible if called…”  The grievor grieved the 45 minute response time imposed by the employer and the employer objected to the adjudicability of the grievance, arguing that it was premature. The adjudicator found that, in the departmental grievance process, the employer believed that the grievance raised a live issue between the parties and that it had failed to raise the issue of prematurity at the first opportunity. 

86 It is not unusual for the employer to demand that a grievance be dismissed on the basis of prematurity and the adjudicator must then decide when the grievance crystallized. Often, the decision was a rather technical one that did not allow for grievors to grieve “upcoming” violations of the collective agreement. Instead, grievors would have to wait until the employer put into action their words, and deal with the violation ex post facto. While the employer now argues that the grievance is untimely, it would have been open to it to argue that the grievance was premature had the grievor filed her grievance in November 2007.

87 I disagree with a technical approach to prematurity and prefer a more realistic approach which does not force a grievor to await an “actual” breach. An unequivocal and clearly communicated decision by the employer to take action which the grievor considers to be in violation of the collective agreement can trigger the right to grieve: Fabrene Inc. v. Northern Independent Union (Mantha Grievance), [1998] O.L.A.A. No 635. In accordance with section 208 of the PSLRA, an employee is entitled to grieve “the interpretation or application” of the collective agreement by the employer, and in this case, the grievor felt aggrieved by the employer´s announced interpretation of her collective agreement. While the Board has recently allowed some grievances that the employer had argued were premature to proceed, it would still be reasonably open to her bargaining agent to counsel her to await an “actual” breach of the collective agreement before filing her grievance. While the Board has recently ruled against the employer on prematurity arguments of this type, it did not go as far as to say that the time limits for grieving were linked only to the announced violation and that any grievance filed later than 25 days after the announcement were then untimely.

88 In summary, on the basis of the former case law, the grievor reasonably followed the advice of her counsel and her union. However, on the basis of the newer jurisprudence, she did not need to await the expiration of her leave.

89 The issue then becomes whether she should be penalized for following the advice she followed.  On the issue of timeliness, it is my view that the answer to this question is yes, as following the (wrong) advice of counsel does not extend timelines.  However, following advice given to you by those you trust and should trust then becomes a factor in deciding the request for the extension of time.

90 Following the incorrect advice of a representative does not extend the deadline for filing a grievance (although it is a factor in any request for extension of time). However, I am not convinced that I would characterize the advice given to the grievor in this case as clearly incorrect. In any event, I do not, in this decision, need to determine whether or not the grievor was obligated to grieve in November of 2007, as the employer alleges, since I have determined that in any event, I would accord an extension of time for her to file her grievance.

B. Whether the grievor should be granted an extension of time

91 Clause 29.08 of the collective agreement provides a 25-day time limit to file of a grievance, as follows:

29.08 An employee may present a grievance to the first level of the procedure in the manner prescribed in clause 29.02, not later than the twenty-fifth (25th) day after the date on which he or she is notified orally or in writing or on which he or she first becomes aware of the action or circumstances giving rise to the grievance.     

92 Despite the provisions of the collective agreement, the Chairperson of the PSLRB has discretion under paragraph 61(b) of the Regulations, in the interest of fairness, to relieve a party who failed to meet the time limit at any level of the grievance process.

93 In making a determination to extend that time limit the following criteria have been considered as a useful test of the "fairness" factor:

1. clear, cogent and compelling reasons for the delay;
2. length of the delay;
3. due diligence of the applicant;
4. balancing the injustice to the applicant against the prejudice to the employer;
5. chance of success of the grievance.

94 Those criteria were first stated in Schenkman v. Treasury Board (Public Works and Government Services Canada), 2004 PSLRB 1, and were followed recently in Vidlak, Mark, Lagacé, Grouchy, and Antonopoulos, Jarry and other cases cited by the parties.

95 As stated in Gill v. Treasury Board (Department of Human Resources and Skills Development), 2007 PSLRB 81, the weight to be given to each criteria is not necessarily the same, and the facts will dictate how they are applied and weighted relative to each other.

96 That is how I have applied the criteria in this case.

1. Clear, cogent and compelling reasons for the delay

97 The grievance challenges the employer´s decision to not grant an extension of the grievor´s leave without pay under a provision in the collective agreement negotiated by the parties as part of employees´ working conditions. The filing of the grievance was preceded by a protracted exchange of correspondence with a number of OSFI representatives, each speaking from his or her operational point of view. When reviewing the exchange of correspondence, I found it difficult to follow who had the authority to speak on behalf of the employer. Mr. Walker testified that he was the only person with the authority to grant a leave of absence with pay to the grievor but that Mr. Leroux “had conduct of the grievor´s file for the purposes of her inquiries.” Nonetheless, Ms. Demers and Ms. Charette also made representations to the grievor.

98 I reviewed the correspondence as to the date on which Mr. Walker exercised his authority to not grant the grievor´s request for an extension of leave without pay.

99 On May 30, 2007, the grievor advised the employer of her intention to extend her leave without pay to May 31, 2008 because her contract with the Central Bank of Bahrain had been extended until May 25, 2008. On June 3, 2007, she received a letter from Ms. Demers, a pay and benefits advisor, stating that her request for an extension for a further year would be granted, that is, for a total of four years (that is, 2005 and 2006, plus one year, 2007, plus a further year, 2008). On June 8, 2007, Mr. Leroux officially extended the leave without pay until May 25, 2008, stating that the grievor would cease to be an OSFI employee after that date and that she would no longer have priority status after May 25, 2009. On June 15, 2007, the grievor wrote to the employer, stating that the conditions of Mr. Leroux´s letter were contrary to her initial agreement with Mr. Walker. On June 25, 2007, the grievor was informed in an email from Ms. Charette that the employer would “not entertain” a request for an additional period of leave without pay after May 25, 2008 (amended to May 30, 2008). On October 5, 2007, the grievor was informed by Mr. Leroux that leave without pay is approved on a case-by-case basis depending on operational and organizational requirements. On November 5, 2007, the grievor asked for a clarification of the criteria used to grant leave without pay requests. Mr. Leroux provided a thorough reply on November 20, 2007. At that point, the grievor sought counsel as to her rights.

100 That sequence of events and the internal OSFI email dated June 6, 2007 admitting that its correspondence with the grievor was vague lead me to believe that the grievor was fully informed on November 19, 2007 of the employer´s refusal to extend her leave without pay beyond May 31, 2008. In my opinion, the time limit to file a grievance began on that date. The grievor filed her grievance on May 30, 2008, that is, six‑and‑a‑half months later.

101 The grievor invoked three substantial reasons for not filing her grievance immediately. The first is that she attempted to find legal counsel, which was not easy because she was outside the country and in a different time zone. The second was that she did not contact the Institute because she did not realize that she was entitled to union representation since she had not paid union dues for some nine years. The third was that she was advised by counsel and her representative that the last date for filing a grievance was May 30, 2008.

102 As stated in Mark, generally, the action or circumstances that give rise to a grievance are time specific and cannot be extended by invoking further circumstances beyond what constitutes the employer's decision. The time limit to file is not unilaterally extended by an employee's attempts to convince the employer to reverse or modify its decision.

103 However, in this case, I am prepared to find that the grievor´s circumstances of being abroad in a modern yet remote country, where communications are delayed, are sufficiently compelling that I should give broader consideration to all her attempts to file a grievance. I find it plausible that the grievor should have attempted to determine the reasons for the employer´s denial of an extension to her leave without pay before filing a grievance since, according to her understanding, the employer had apparently modified its position since 2004. This is especially true because of the consequences to her continued employment in Bahrain.

104 I note that, once informed of the employer´s reasons, the grievor to contacted counsel after November 19, 2007. Her evidence was not contradicted that Ms. Auclair, whom she had previously retained, was not available. The grievor received counsel´s advice in March 2008 and then filed a formal request for leave without pay in accordance with the collective agreement on March 12, 2008. She then contacted the Institute for advice. She followed the advice of her counsel and the Institute. Although that may not have been the best advice under the circumstances, she cannot be faulted for following it. Although her actions took some time, they demonstrate that she had every intention of filing a grievance and, in my view, are cogent and compelling reasons to explain the delay.

2. Length of the delay

105 The employer argued that the grievor had access to a fax machine and a telephone and to email to file a grievance. The employer argued further that the grievor did not make her intentions clear that she was filing a grievance until May 30, 2008. The employer pointed out that she could have consulted the collective agreement to find out about her rights. The employer stated that adjudicators have denied extensions of the time to file grievances even in extreme cases, such as those involving mental disability.

106 Those arguments do not realistically take into account that the grievor was in a distant foreign country and that she did not have ready access to a union steward. The employer´s evidence did not contradict the grievor´s testimony that she did not always have immediate access to instant means of communication or that it took her some time to find appropriate counsel. There is no evidence before me that the delay caused any prejudice to the employer. On the other hand, the employer´s reply to the grievance, dated November 5, 2008, came some five months after the grievance was filed. I further consider that the nature of the grievance does not raise a factual situation that is prejudicial to the employer. The employer was fully able to present its evidence on the merits. Therefore, I conclude that, under the circumstances, the delay is not a significant factor.

3. Due diligence of the applicant

107 For the reasons provided earlier, I am of the view that the grievor was diligent under the circumstances. Her correspondence with the employer addressed relevant questions, and she sought clarification when she was uncertain. The answers that she received from different persons within the OSFI were not always entirely clear. Although the untimely advice of her counsel accounts for a great deal of the delay, I am not prepared to dismiss the application on that basis alone. Overall, I find that the grievor acted consistently and that she never indicated that she had abandoned her rights.

4. Balancing the injustice to the applicant against the prejudice to the employer

108 As explained earlier, as the employer has been in a position to fully present its case on the merits, I do not consider that it has been prejudiced by the delay in filing the grievance. In fact, the prejudice that the grievor would suffer were I not to grant the application would vastly outweigh any prejudice to the employer.

5. Chance of success of the grievance

109 This factor does not usually require a comprehensive review of the merits of the grievance but only of whether the grievor has an arguable case. In this case, the application to extend the time limit and the merits of the grievance were heard concurrently. For the reasons that follow, I am of the view that the grievance raises an arguable question of whether the employer breached the collective agreement.

110 Accordingly, I conclude that the delay for filing the grievance was due to reasons outside the grievor´s control. I find that, in the particular circumstances of this case, a delay of six months was not unreasonable because the employer was aware at all times that the grievor wished to extend her leave without pay for a further five years. Accordingly, the grievor should not be deprived of her recourse to file a grievance and have it referred to adjudication.

B. The merits of the grievance

111 The grievance raises the following two issues: whether the employer was estopped from refusing to extend the grievor´s leave without pay because of prior representations, and whether the employer unreasonably applied its discretion when it refused to extend the grievor´s leave without pay.

1. Estoppel

112 Clause 17.15 of the collective agreement provides as follows that the employer may grant leave with or without pay for reasons other than those specified in the collective agreement:

At its discretion, the Employer may grant:

…

(b) leave with or without pay for purposes other than those specified in this Agreement.

113 Estoppel is essentially a doctrine of fairness, requiring that three conditions be satisfied. First, one of the parties, by words or conduct, makes a promise or assurance. Second, the promise or assurance is intended to affect the parties´ legal relationship. Third, the party to whom the promise or assurance was made takes the other party at its word and acts on it to its detriment. Therefore, if one party acts on the promise and assurance, then the other party cannot go back on its word and act as if the promise or assurance was not made. The party raising an estoppel argument has the burden of proof.

114 I will apply those principles to this case. Did the employer, by its words or conduct, make a promise or assurance to the grievor? On that point, the important evidence precedes the grievor accepting the offer of employment in Bahrain, since, at that point, she alleges that she acted on the alleged promise or assurance.

115 The following exchange of correspondence took place between March 23, 2004 and May 19, 2004. The initial letter from the grievor´s counsel, Ms. Auclair, on March 23, 2004 to Ms. Pasteris, the assistant superintendent, sets out the grievor´s expectations. Ms. Pasteris replied to Ms. Auclair as follows on March 31, 2004:      

[Translated]

This is a follow up on the leave application submitted by Joanne Prévost with respect to an assignment at the Bahrain Monetary Agency, as specified in your letter dated March 23, 2004. We are proud of Ms. Prévost´s interest in staying with us and we recognize that, under the circumstances, the assignment will be advantageous for her. In principle, we will allow Ms. Prévost two years of unpaid leave.

At the end of that period, Ms. Prévost will be eligible for an RE‑06-level position in either Ottawa or Toronto or she will be declared surplus, in accordance with the OSFI Workforce Adjustment Policy. With respect to the other terms and conditions of the leave, we are prepared to offer the following to Ms. Prévost:

…

116 In her reply on April 16, 2004, Ms. Auclair requested the following clarification:

…

[Translated]

However, your letter does not indicate whether Ms. Prévost would be entitled to extend her unpaid leave, with the ability to contribute to the different plans, as detailed in your letter, beyond the initial period of two years´ leave. After a discussion between Ms. Prévost and Gary Walker of your office, he confirmed to her that she could indeed exercise that option, although she would lose her surplus employee status, and that her name would be placed on a priority list with the Public Service Commission for one year after she returns to the country. We ask that you confirm that interpretation about the possible renewal of the unpaid leave.

…

117 Ms. Pasteris replied with the following on April 29, 2004:

…

[Translated]

This is to confirm that Ms. Prévost can renew her two-year unpaid leave of absence, as Gary Walker indicated to her during a conversation.

Ms. Prévost will retain her OSFI employee status for the entire duration of the authorized leave, which will allow her to continue to contribute to the pension plan and to remain covered under the benefit plan.

However, as we specified in our first letter, should Ms. Prévost decide to extend the unpaid leave, she will lose her job and her surplus employee status at the OSFI on returning to the country. When she returns, her name will be entered on a priority list with the Public Service Commission if the OSFI is still subject to the Public Service Employment Act.

…

118 On May 13, 2004, Mr. Walker confirmed certain terms of the grievor´s leave without pay as follows:

I am writing to you regarding your request for leave of absence to undertake an assignment with the Bahrain Monetary Authority. The Office is pleased to grant you such a leave of absence for the period of May 31, 2004 to May 31, 2006. As per our discussions:

For the duration of this leave, and up to one year´s extension (to May 31, 2007), you will make pension and benefits contributions at a single rate (employee share only).

Should you return to OSFI by May 31, 2005, you will retain your current status as a surplus employee in accordance with OSFI´s Workforce Adjustment Policy.

Should you return to OSFI after May 31, 2005, you will no longer be accorded surplus status but would be granted priority status for a period of one year in accordance with section 30(1) of the Public Service Employment Act.

If at the end of your priority period, you have not been appointed to another position, in accordance with section 30(4) of the Public Service Employment Act, you will cease to be an employee.

Should you wish to extend your leave beyond May 31, 2007, your contributions for pension and all other benefits will be at double rate from that time forward. In any case, please advise us in writing of your intentions at least 3 months prior to the end of your assignment.

This agreement supersedes that presented in OSFI´s letter to Ann-Julie Auclair dated March 31, 2004.

…

119 On May 19, 2004, Mr. Poirier, on behalf of Mr. Walker, emailed the following to the grievor:

Joanne,

In reply to your question to Gary yesterday regarding pension, please be advised that the maximum permitted, for leave without pay (LWOP), is 5 years of cumulative full-time equivalent pensionable LWOP, excluding sick LWOP and on loan LWOP cases.

Once the contributor´s total pensionable LWOP reaches the pensionable limits, any additional period of LWOP (exclusive of sick LWOP and on loan cases), will not be considered pensionable.

Therefore, in your particular case, your upcoming leave is considered “on loan” and will not be affected by this rule. However, any extension of LWOP beyond May 31, 2007, will be considered as “personal LWOP” and the maximum 5 year period will apply from that point onwards.

If you need further information, please let me know.

…

120 Based on those representations, the grievor accepted employment in Bahrain for an initial period of two years.

121 From that exchange of correspondence, I understood that the OSFI was prepared to grant the grievor a two-year leave without pay that could be extended. During the first three years, she would assume only the employee share of contributions to the pension and benefits plans. If the leave without pay were extended beyond three years, that is, beyond May 31, 2007, the grievor would then assume the employer and employee´s shares of the contributions to the pension and benefits plans, to a maximum of five years.

122 Based on that correspondence, I conclude that the employer by its words and conduct gave assurances to the grievor that her leave without pay would be extended beyond the initial two-year period to May 31, 2007 and then for a further five year pensionable period. The employer´s intention to limit the grievor´s leave without pay to two years plus a one-year extension is not stated and could not reasonably have been understood to exist by the grievor.

123 The conditions under which the grievor could return to the workplace were clear enough that I do not consider that she was foolish to accept employment in Bahrain, as argued by the employer. In my view, the parties concluded a bargain that was beneficial to both, and the grievor was entitled to rely on the employer´s representations, which were surely made in good faith. Consequently, the employer cannot go back on its word and act as if the promise or assurance had not been made. In this case, I find that the grievor has met the burden of proof for an estoppel argument.

124 I also dismiss the employer´s argument that an estoppel argument can only arise between an employer and a bargaining agent. On that point, I am persuaded by the findings in Ontario (Ministry of Labour) v. O.P.S.E.U. (Sutherland). In that case, the grievor had been denied a compressed workweek arrangement that had been promised during the job interview process.  Arbitrator Dissanayake reviewed the jurisprudence as it related to the issue of the invocation of promissory estoppel based on an alleged representation that did not involve the union as the other party to the collective agreement, noting that Ontario Public Service Employees Union v. Ontario (Ministry of Community and Social Services) (1995), 27 O.R. (3d) 135, is still good law. He wrote the following:

Notwithstanding the legal prohibition against individual contracts, the courts have acknowledged the jurisdiction of arbitrators to apply the doctrine of estoppel, in appropriate circumstances to grant relief to an employee based upon a representation to that person by the employer.

He then goes on to cite part of the decision of the Divisional Court in the OPSEU case:

…

…Indeed, it is doubtful that any other forum is available should boards of arbitration reject these employee claims.  On the other hand, labour arbitrators are mutually chosen by the parties because of their particular labour relations expertise and more permanent grievance tribunals, such as the Grievance Settlement Board, build up an impressive similar expertise. The Board, therefore, is in the best position to work out and assess the important policy implications of permitting access to the doctrine of estoppel by individual employees governed by this particular statutory framework. While there may be strong labour relations policy considerations which support the dismissal of the grievance, there was no superintending jurisdictional constraint which “bound” the Board to decide as it did. The Grievor´s treatment was obviously unfair. The Board must take responsibility for the determination of her grievance, whatever that outcome may be.

…

125 In this case, I am being asked to reconcile the need to ensure fair treatment of the grievor while keeping in mind the labour relations policy that favours the collective relationship between the employer and the union. The grievor made out a case based on the traditional elements of estoppel, and I am persuaded that it makes labour relations sense to rectify a manifest unfairness to her. I find that the employer gave her an expectation of an extension of her leave without pay beyond an initial period of two years. The only restriction was that, if the leave without pay extended beyond three years, that is, beyond May 31, 2007, the grievor would have to assume the employer´s and employee´s shares of contributions to the pension and benefits plans.

126 I agree that there is no absolute right under the collective agreement to leave without pay. However, in this case, the employer set out the option to the grievor of an extended leave without pay based on her contributions to the pension and benefit plans. The employer did not set out its management rights to accept or refuse an extension until after she relied on its representations to her detriment. The creation of an estoppel in these circumstances does not in my view change or run counter to the collective agreement. The grievor requested leave without pay based on rights found in the collective agreement. The terms were no less favourable or more favourable than those in clause 17.15 or those granted to Mr. Hubert. The employer´s consent to the requested leave did not in any way affect the status of the collective agreement; nor did it undermine the Institute´s status as the exclusive bargaining agent. That was demonstrated by the fact that the Institute actively advocated on behalf of the grievor that the employer be estopped from reneging on its representation.

127 Therefore, I conclude that, in the circumstances of this case, the balance is clearly tipped in favour of remedying a manifest inequity to the grievor. In addition, I find that there are no labour relations policy considerations that mitigate against applying the doctrine of estoppel, and therefore, I have the jurisdiction to determine the grievance on the basis of the Institute´s claim of estoppel.

2. Whether the employer unreasonably applied its discretion when it refused to extend the grievor´s leave without pay 

128 The principles that govern the exercise of management´s discretion were ably summarized by arbitrator Swan in Kawartha Pine Ridge District School Board as follows:

…

In assessing an exercise of management discretion, arbitrators have typically referred to the administrative law principles relating to the proper exercise of a discretionary power. Generally, those principles are considered to be as follows: (1) The decision must be made in good faith and without discrimination. (2) It must be a genuine exercise of discretionary power, as opposed to rigid policy adherence. (3) Consideration must be given to the merits of the individual application under review. (4) All relevant facts must be considered, and conversely irrelevant considerations must be rejected …

…

129 In this case, I accept that the employer´s decision was made in good faith and without discrimination and that it was a legitimate exercise of its authority as provided in the collective agreement. I also accept that the employer considered the individual merits of the grievor´s application for leave without pay beyond 2008. However, in my view, the employer omitted considering important facts that distinguished the grievor´s case from other more routine requests. Mr. Leroux wrote as follows to the grievor on November 20, 2007 about the OSFI´s reasons for not extending her leave without pay:

Johanne,

I hope that the following will provide you with the information you need to fully understand OSFI´s position in this matter.

Leave without pay is a temporary unpaid absence from duty that is granted to federal government employees when there is a direct benefit to the organisation in providing continuity of employment, and that this benefit outweighs the cost and the ongoing liability. In addition, the temporary nature of leave without pay means that there is an expectation that the employees will return to the service of the government of Canada and that they will have gained valuable knowledge and experience that would allow them to make a greater contribution to the public service.

Our files show that, since November 13^th, 1998, you have either been on Leave without Pay or on Secondment except for a period of 4 months where you were in OSFI´s employ. While a leave period of a few years could be of benefit to the organisation, a prolonged absence is not seen as beneficial as the disadvantages (cost and ongoing liability) outweigh the advantages.

In addition, your e-mail makes it clear that you are requesting a further five years of leave without pay for the purpose of increasing your pension at the time of your retirement. It is our position that you have already been permitted to increase your pensionable service significantly over the past ten years while working abroad, and while the work you are doing is certainly important, it is not in the “service of Canadians”. Further, pension plan contributors should not be expected to bear the burden of the increased cost of your pension upon your retirement.

Lastly, as I mentioned to you in one of our discussions, as Director, Human Resources and Administration, it is my responsibility to represent “management” in these types of issues and to keep them informed of our position. I´ve included Bob Hanna in this e-mail for his information.

I hope this answers your questions and wish you all the best in your future endeavours.

[Emphasis added]

130 There is no dispute that the grievor had been away for nine years when she requested that consideration be given to extending her leave without pay for a further period. I am of the view that the reasons for which she was absent add another dimension to her reasons for requesting an extension. The grievor was first absent between 1998 and 2001 on an assignment with the Basel Committee, a position she obtained through an internal competition at the OSFI. Even though she was physically absent from the OSFI´s offices, that position constituted continued employment with the OSFI since she acted as its representative on the Committee. When she returned from Switzerland, she was assigned to a yet to be defined position; her responsibilities consisting of creating it. There was no evidence of what eventually became of this position. Through her own efforts, she found employment more suited to her abilities at the Toronto Centre, where she enabled the OSFI to meet its “in kind” obligations towards it. Again, even though she was physically absent from the OSFI, she was gaining the “… valuable knowledge and experience that would allow [her] to make a greater contribution to the public service.” When it came time to return to the OSFI after that assignment, she was declared surplus to requirements. Although assignments were implemented as leave without pay, they were part of the OSFI´s mandate, and the grievor was “… on loan to another to another organization and to the advantage of the employer,” as Mr. Poirier wrote Mr. Walker in an internal email dated May 18, 2004. Surely, the employer cannot fault the grievor for having been away on those assignments. I find these considerations irrelevant to the employer´s deliberation on whether or not to extend the grievor´s leave of absence without pay.

131 The following exchange of emails that the grievor obtained through an access to information request is revealing:

[Email from Mr. Poirier to Mr. Walker dated May 18, 2004:]

Gary,

From what I understand from your letter to Johanne, you have approved her leave of absence from May 31, 2004 to May 31, 2006 and this leave is considered as “ON LOAN TO ANOTHER ORGANIZATION AND TO THE ADVANTAGE OF THE EMPLOYER”……also, you have given the possibility of a one-year extension to May 31, 2007 which I assume that it will also be considered ON LOAN etc etc.

However, if the leave of absence goes beyond May 31, 2007, are we changing the reason of her Leave of absence: “Personal Reasons” from that point onwards and she will pay contributions at the double rate…

Am I understanding this correctly.

If so, this is what I plan to reply to her regarding yesterday´s question…any comments

…

[Sic throughout]

[Reply from Mr. Walker, dated May 19, 2004:]

I think this is a fair interpretation of the rules although I would not use the words AND TO THE ADVANTAGE OF THE EMPLOYER when communicating with Joanne [sic]. We are granting her single contribution because she has agreed to resign after 3 years, not because we will gain from her experience whixh [sic] is the true intent of the words.

132 From that exchange of emails and from those quoted at paragraphs 108 and 111 of this decision, I take the view that, although the employer understood that it was granting a two-year leave without pay with a renewal of only one year, this was not communicated to the grievor. Mr. Walker´s letter to the grievor dated May 13, 2004 is open-ended when it states, “Should you wish to extend your leave beyond May 31, 2007 … .” Mr. Poirier´s May 19, 2004 email to the grievor states that the maximum permitted leave for without pay for pensionable purposes is five years of cumulative full-time-equivalent leave without pay and states that the grievor would be considered on loan until May 31, 2007 and on personal leave without pay for the next five years. On June 8, 2007, Mr. Leroux extended the grievor´s leave without pay until 2008 - contrary to the two years with a one-year extension previously insisted on - but as leave without pay for personal reasons. On June 25, 2007, Ms. Charette emailed the grievor, confirming the additional one-year period to May 31, 2008, and stated for the first time that that no additional request for leave without pay would be considered.

133 The undisputed evidence is that the grievor applied for employment with the Central Bank of Bahrain through an international competitive process because she was surplus to requirements at the OSFI and because she had not had any contact or other offer of employment from the OSFI for several weeks after being declared surplus. Mr. Walker admitted that, in May 2004, no job offer was forthcoming for the grievor. No evidence was tendered to confirm that any efforts were made to find alternate employment for the grievor while she was on leave without pay. Mr. Walker was amenable to the grievor taking the assignment in Bahrain because it meant giving up continuing employment with the OSFI after three years. Given that the employer had no meaningful employment for the grievor when she returned from Switzerland, that it declared her surplus to requirements when she came returned the Toronto Centre, that it admitted that no job offer was forthcoming when she accepted employment in Bahrain and that it would profit from her assignment by not having to re-employ her, I fail to see how it can fault the grievor for a lack of continuity of employment for nine years and expect that she would return to the service of the Government of Canada after her assignment in Bahrain. Truly, the grievor´s circumstances were exceptional, and the employer should have considered them when it made its decision.

134 Mr. Leroux testified that one of the reasons for refusing to grant the grievor an extension was the administrative burden of continuing to deal with her request, which he described as the cost of “the paperwork.” He admitted that he had never figured out that cost. Another reason was the ongoing liability caused by the increase to the grievor´s eventual pension benefits for the Government of Canada and for other pension contributors. Mr. Leroux admitted that he had not considered the fact that the OSFI had economized seven months of the grievor´s pay as a surplus employee, that he had not calculated the additional cost to the Government of Canada and pension contributors and that he had not researched the impact of the grievor assuming the employer´s contribution toward her pension benefit.

135 In light of the employer´s lack of research as to the true costs of the grievor´s leave without pay, I am not persuaded that those considerations were as important as they have been made out.

136 Treating the grievor´s request for an extension of her leave without pay merely as a request to facilitate a more generous pension was an unreasonable characterization of her request. In my view, the employer did not ascribe adequate weight to the importance of her request for leave without pay given this more important consideration in her case of continued gainful employment.

137 My view is that the initial granting of leave without pay led the grievor to believe that it would be renewed on request and without any conditions other than that she assume the employer´s share of contributions to the pension and benefit plans after three years. The reasons the employer invoked in 2007 for refusing to extend the leave without pay beyond 2008 were not clearly communicated to the grievor at the outset. If she had known that the employer had no intention of giving her the full benefit of the leave policy that it described to her in its correspondence, I can only speculate what the grievor´s decision might have been in 2004. Furthermore, the employer did not introduce any evidence of a written policy on which it based its decision. Mr. Walker´s evidence was that requests are treated on a case-by-case basis.

138 Based on those observations, I conclude that, although the employer acted in good faith, its decision to deny the extension of the grievor´s leave without pay inadequately considered the importance of the requested leave and failed to consider extenuating circumstances that justified a more compassionate view of the grievor´s circumstances. Although no procedural failure occurred in the exercise of the employer´s discretion, I find that the grievor´s request for an extension of her leave without pay was unreasonably refused and therefore that it was a breach of clause 17.15 of the collective agreement. For that reason, I allow the grievance and order that the grievor be granted leave without pay until May 31, 2012, in accordance with the conditions set out in the order that follows.

139 For all of the above reasons, I make the following order:

V. Order

140 The grievance is allowed.

141 The employer is to grant the grievor leave without pay until May 31, 2012, with the condition that she contribute both the employee´s and the employer´s shares of the pension and other benefit plans to the end of the term.

142 The grievor is to receive any other benefit entitlement that she is owed as an OSFI and federal public service employee for the duration of her leave without pay.

143 Should any difficulty arise in implementing this decision, I retain jurisdiction for a period of 60 days to fully conclude this matter.

October 21, 2011.

Michele A. Pineau,
Vice-Chairperson