FPSLREB Decisions

File: 166-2-27345 Public Service Staff Before the Public Service Relations Act Staff Relations Board BETWEEN LESLIE G. HICKS Grievor and TREASURY BOARD (Human Resources Development Canada)

Employer

Before: P. Chodos, Deputy Chairperson For the Grievor: Yvette Michaud, The Professional Institute of the Public Service of Canada

For the Employer: Judith Begley, Counsel

Heard at Halifax, Nova Scotia, March 26, 1997.

Decision Page 1 DECISION Mr. Hicks’ grievance states as follows: “Salary paid is less than agreed in offer of appointment following an external competition.” The parties submitted an Agreed Statement of Facts which is set out below. In addition, Mr. Hicks testified on his own behalf, and the employer called one witness who testified with respect to the employer’s rules governing the determination of salary following a promotion. AGREED STATEMENT OF FACTS 1. The Grievor, Les Hicks, is currently employed as Principal Advisor to the Coal Mining Safety Commission in the Labour Program of Human Resources Development Canada, in Sydney, Nova Scotia as an EN-ENG-05.

2. In October 1994, while employed in an EN-ENG-04 position with Human Resources Development Canada, Les Hicks participated in an open competition for the EN-ENG-05 position which he now encumbers.

3. By letter dated November 25, 1994 signed by Gaston Martin, Director, Les Hicks was offered the position of Principal Advisor to the Coal Mining Safety Commission, EN-ENG-05. This letter stipulated that Les Hick’s salary on appointment would be determined in accordance with the Public Service Terms and Conditions of Employment Regulations.

4. Pursuant to the Engineering and Land Survey Group Agreement, the salary range for this position is between $60,285.00 and $72,539.00 per annum.

5. By letter dated November 29, 1994, Les Hicks proceeded to negotiate his starting salary.

6. By letter dated December 5, 1994, signed by Gaston Martin, Les Hicks was offered a starting salary of $67,632.00 This was confirmed in a subsequent letter of December 7. These letters are attached as Appendices A and B.

7. Les Hicks accepted the offer of appointment with a starting salary of $67,632.00. (Appendix C attached). This acceptance was further confirmed by letter of Gaston Martin, dated December 12, 1994. Letter attached as Appendix D.

8. On December 12, 1994, Les Hicks began working as Principal Advisor. He assumed that he was being paid $67,632.00 as had been agreed upon when he accepted the offer of appointment.

Public Service Staff Relations Board

Decision Page 2 9. In late March 1995, Les Hicks received notification of his first pay cheque as Principal Advisor and the retroactive pay. He noticed that the rate of pay was not at the agreed rate but at a lower rate of $65,179. Prior to receiving this cheque, Les Hicks had received no indication that his pay would be less than had been agreed. He assumed that an error had been made. On April 6, 1995 Les Hicks wrote to Mr. Martin asking that the error be corrected. Letter attached as Appendix E.

10. Gaston Martin was made aware in early April of an administrative error with respect to Les Hick’s pay rate. On April 28, 1995, Mr. Martin and Douglas Chiasson met with Mr. Hicks. Mr. Chiasson was at the time Administrative Officer, and had been the President of the competition. Gaston Martin and Douglas Chiasson stated to Les Hicks that under the Public Service Terms and Conditions of Employment Regulations his appointment to the EN-ENG-05 position constitutes a promotion and not an external appointment, and therefore the department has no authority to negotiate a pay rate above the rate which is indicated by the Public Service Terms and Conditions of Employment Regulations. Gaston Martin confirmed this determination with Les Hicks in a letter dated May 18, 1995. Letter attached as Appendix F.

11. ( Deleted by the parties ). 12. ( Deleted by the parties ). 13. From December 12, 1994, the date of his promotion, to March 22, 1995 Mr. Hicks was paid at his prior EN-ENG-04 rate. As of March 23, 1995 he began to be paid at the pay rate of $65,179. and received retroactive pay at that time. Mr. Hicks was never paid at the negotiated salary rate.

14. On June 23, 1995, Gaston Martin wrote to Les Hicks in an attempt to re-issue the offer of employment at the pay rate of $65,179. He asked Les Hicks to confirm his acceptance or rejection of that offer by July 10, 1995 (17 days). Letter attached as Appendix G.

On July 10, Les Hicks wrote to Gaston Martin maintaining that the original offer and acceptance of December, 1994 were still in effect. Appendix H.

15. This agreement is made without prejudice to the right of each party to submit at the hearing any additional oral

Public Service Staff Relations Board

Decision Page 3 or written evidence not at variance with this agreed statement of facts.

Attachments: Appendices A, B, C, D, E, F & G (Adjudicator's note: attachments noted-above have been omitted from this decision).

In his testimony Mr. Hicks expanded upon some of the circumstances set out in the Agreed Statement of Facts. He noted that the position had originally been advertised in the Halifax Chronicle-Herald on October 8, 1994. According to Mr. Hicks, ten persons were interviewed, of which three were public servants. When Mr. Hicks was advised that he was a successful applicant he felt he could justify a starting salary above the minimum and accordingly began negotiating a salary rate with his superiors, resulting in a salary offer of $67,632. When he was ultimately advised that a mistake had been made and that in accordance with the Public Service Terms and Conditions of Employment Regulations (PSTCER) he was not entitled to the agreed upon salary, he made it clear that he did not accept this interpretation. Mr. Hicks observed that he had participated in competitions in the past in which pay above the minimum was granted; he was also aware that the previous incumbent of this position had been paid above the minimum when first appointed to the position. In cross-examination Mr. Hicks acknowledged that the previous incumbent was not a public servant when he was appointed to the position.

Mr. Hicks referred to paragraph 2.2 of the Treasury Board Manual on Personnel Management “Pay Rate Selection” which states: “A policy decision was approved by Treasury Board that salaries above the minimum could be offered in circumstances where it is considered necessary in order to obtain suitably qualified persons.” (Exhibit G-1).

Ms. Marie Murray testified on behalf of the employer; she is the Chief, Compensation and Benefits in the Nova Scotia region for the Department and has worked in that field for 30 years. Ms. Murray noted that the determination of pay increases is governed by the Public Service Terms and Conditions of Employment Regulations (PSTCER) in conjunction with the relevant collective agreement. Ms. Murray outlined the steps to be followed in determining the rate of pay on promotion. The first step is to determine the lowest increment in the new position;

Public Service Staff Relations Board

Decision Page 4 then the difference between the maximum rate of pay of the new position and the former position is calculated. If the difference between the two maxima exceeds the lowest increment, it is determined to be a promotion. The lowest increment of the new position plus the salary of the old position is added together to determine the new salary which cannot be less than the salary the incumbent received in his or her previous position. That is, one would find the step in the salary range for the new position which is nearest to, but not less than the former salary. Ms. Murray observed that this process is mandated by the Regulations, which do not permit the manager to offer a different salary rate to persons within the Public Service other than that which is calculated as noted above. Ms. Murray acknowledged that persons appointed from outside the Public Service can receive a salary which is greater than the salary level determined in accordance with these calculations.

The grievor’s representative submitted that the issue in this case is whether the employer should be permitted to retract an offer of employment which was duly negotiated and accepted by the grievor. Mr. Hicks had clearly proceeded in good faith to negotiate a salary within the range of rates set out in the offer of appointment. Mr. Gaston Martin, on behalf of the employer, had offered him a salary of $67,632. which Mr. Hicks had accepted in writing. Accordingly, there were representations in the form of an offer and a clear and unequivocal acceptance of that offer, which has been acknowledged by the employer.

Ms. Michaud argued that there are precedents which establish that there can be a divergence from the strict rules of the PSTCER under certain circumstances, specifically where an employee is promised a certain salary and confirms that promise in writing. Under these circumstances the employer should not be permitted to roll back the salary. In support of this submission Ms. Michaud referred to the Federal Court decision in Canada v. Lajoie, [1992] 149 N.R. 223 and the Board decisions in Antonopoulos (Board file 166-2-20363) and Adamson (Board file 166-2-16207). The grievor’s representative also argued that this is a proper case for the application of the principles of promissory estoppel; that is, the employer should be estopped from applying the strict terms of the Regulations given the grievor's reasonable expectations that he would be receiving a salary rate above that provided by the Regulations. In support of this contention the grievor’s representative referred to the

Public Service Staff Relations Board

Decision Page 5 Board decision in Molbak (Board file 166-2-26472) (upheld by the Federal Court: Canada v. Molbak, Court file no. T-2287-95).

The grievor also contended that the Regulations do not apply where there is an open competition; it was submitted as well that paragraph 2.2 of the employer’s own manual (supra) authorizes the payment of salaries above the minimum.

Counsel for the employer acknowledged that Mr. Gaston Martin, the grievor’s superior, unknowingly made an error when he negotiated a salary with Mr. Hicks which was above the amount permitted under the Regulations. However, subsection 24(1) of the PSTCER delineates in detail how the salary increases on promotion are to be determined; in accordance with those provisions, Mr. Hicks was only entitled to a salary rate of approximately $65,000. Mr. Martin had no authority to offer him anything more than that, as Mr. Hicks was in the Public Service at the time that he received his promotion. Ms. Begley submitted that there is clear law that an employer governed by a collective agreement is constrained by the provisions of that agreement and cannot vary from them by negotiating a separate deal with individual employees (see Canadian Labour Arbitration, Brown and Beatty, paragraph 2:1210). Ms. Begley also submitted that the only avenue that may be open to an employee in these circumstances is the doctrine of estoppel; however, that equitable doctrine does not apply in these circumstances, since Mr. Hicks cannot demonstrate detrimental reliance. There is no suggestion that Mr. Hicks would not have taken the job but for the extra amount of money that he was promised. Furthermore, a disappointed expectation is not sufficient to establish a detriment.

With respect to the jurisprudence cited on behalf of the grievor, counsel for the employer contended that they are distinguishable on their facts; she noted that in Molbak (supra) there was clear detrimental reliance; in both Adamson and Antonopoulos (supra) the relevant collective agreement supported the grievor’s position; counsel noted the conclusion in the Lajoie decision (supra) that “there is nothing in the applicable legislation which imposes the result sought by the government”.

Public Service Staff Relations Board

Decision Page 6 Reasons for Decision The issue in this case is whether the starting salary rate which the grievor had negotiated and agreed to with his manager, Mr. Gaston Martin, can be unilaterally modified by the employer in order to conform with the provisions of the PSTCER.

It is the employer’s contention that Mr. Hicks’ salary entitlement is governed by the PSTCER and in particular section 24 of these Regulations. There is no dispute that pursuant to the relevant collective agreement (i.e. Engineering and Land Survey collective agreement, Code: 210/91) the determination of pay on promotion is governed by the PSTCER, by virtue of clause 19.01 of that collective agreement. Moreover, the grievor does not dispute that his salary on promotion, as calculated pursuant to these Regulations, establishes a salary rate which is less than the salary rate which he was promised by Mr. Martin, that is, $65,179. as opposed to $67,532. However, notwithstanding this fact, the grievor contends that the employer should be bound by the original representations made by Mr. Martin, and therefore he should be paid the higher salary. In my view, the grievor’s contention is unsupportable.

Firstly, it is clear that the Regulations in question are intended to govern employees such as the grievor; the definition of “employee” which is found in section 2 states that “employee” means a person employed in Part I Service, classified in one of the “occupational categories” defined and listed in section 2 of the Public Service Staff Relations Act ...”. There is no doubt that this definition includes Mr. Hicks, who was employed in the Public Service prior to his promotion and continued to be so following his promotion. Mr. Hicks argues that the rules set out in the Regulations respecting pay on promotion should not apply to him as he was a successful candidate in an open competition. With respect, I see nothing in the collective agreement or the Regulations which makes that kind of distinction for the purposes of determining pay. Indeed, neither the collective agreement nor the Regulations make any reference to open or closed competitions. The fact that the employer’s pay administration manual allows the employer to offer persons outside the Public Service a pay rate above the minimum is of no assistance to the grievor as he is not subsumed by that provision. The question as to whether it is fair to allow for that possibility only for persons who come from outside the Public Service is beyond the purview of this proceeding; both the parties and an adjudicator under the PSSRA are bound by

Public Service Staff Relations Board

Decision Page 7 the provisions of the collective agreement and the rules incorporated by reference in the collective agreement.

I must also conclude that the grievor cannot successfully invoke the equitable doctrine of promissory estoppel in the circumstances of this case. I agree with counsel for the employer that a fundamental aspect of this doctrine is that detrimental reliance must be demonstrated. There is no suggestion that the grievor would have declined the appointment had he been offered a salary that was lower than the amount offered to him by Mr. Martin. Even if it could be said that the grievor in some way relied upon the representations made by Mr. Martin, there is no evidence that he suffered any detriment as a consequence. The fact is that the grievor’s salary on promotion was higher than the salary he received in his previous position, and he never received the higher salary rate that was promised to him by Mr. Martin. These circumstances are vastly different from the facts in, for example the Molbak case (supra) where the grievor had been in receipt of the higher salary for approximately a year, and had incurred significant financial liabilities as a result of the employer's actions. Accordingly the doctrine of promissory estoppel has no application in this case.

I have no doubt that Mr. Hicks was bitterly disappointed upon learning that he would not receive the salary which was promised to him by his superior. His disappointment was very likely exacerbated by the manner in which he learned about this error, as apparently no one bothered to tell him that his salary was less than he expected until he made inquiries upon receiving his first pay cheque. However, this alone cannot be a basis for setting aside the rules and regulations governing pay administration. Under those rules Mr. Hicks was entitled to no more than the salary rate of $65,179; the fact that he was led to expect a higher salary from his superiors does not per se confer on him a legal right to that higher salary. Accordingly, this grievance must be denied.

P. Chodos, Deputy Chairperson.

OTTAWA, April 25, 1997.

Public Service Staff Relations Board