FPSLREB Decisions

[1]      This set of grievances is the latest in a line of grievances filed by employees in several bargaining units for which the Public Service Alliance of Canada (PSAC) holds bargaining rights, challenging the manner in which the employer calculates premium pay for employees subject to variable shift schedule arrangements (VSSA) and variable hours of work (VHW) as provided by the governing collective agreement. Here the agreement is the one between Treasury Board (TB) and PSAC signed May 16, 2000, providing terms and conditions of employment for all employees in program and administrative services (Exhibit No. 1). For the reasons which follow, I find that these grievances must be sustained.

[2]      Although the focus of this dispute between the parties is the interpretation and implementation of the provisions found at Article 25.27 (e)(ii) of the collective agreement governing compensation for designated paid holidays (DPH), I include here the broader sweep of collective agreement articles touching hours of work and pay administration which are engaged. These read in relevant part:

ARTICLE 6

MANAGERIAL RESPONSIBILITIES

6.01	Except to the extent provided herein, this Agreement in no way restricts the authority of those charged with managerial responsibilities in the Public Service.

Day Work

25.06	Except as provided for in clauses 25.09, 25.10 and 25.11:
(a)	the normal work week shall be thirty-seven and one-half (37 1⁄2) hours from Monday to Friday inclusive,
	and
(b)	the normal work day shall be seven and one-half (7 1⁄2) consecutive hours, exclusive of a lunch period, between the hours of 7 a.m. and 6 p.m.
25.09	Variable Hours
(a)	Notwithstanding the provisions of clause 25.06, upon request of an employee and the concurrence of the Employer, an employee may complete the weekly hours of employment in a period of other than five (5) full days provided that over a period of fourteen (14), twenty-one (21) or twenty-eight (28) calendar days, the employee works an average of thirty-seven and one-half (37 1⁄2) hours per week.
(b)	In every fourteen (14), twenty-one (21) or twenty-eight (28) day period, the employee shall be granted days of rest on such days as are not scheduled as a normal work day for the employee.
(c)	Employees covered by this clause shall be subject to the variable hours of work provisions established in clauses 25.24 to 25.27.
25.10	Summer and winter hours

The weekly and daily hours of work may be varied by the Employer, following consultation with the Alliance to allow for summer and winter hours, provided the annual total of hours is not changed.

Shift Work

25.13	When, because of the operational requirements, hours of work are scheduled for employees on a rotating or irregular basis, they shall be scheduled so that employees, over a period of not more than fifty-six (56) calendar days:
(a)	on a weekly basis, work an average of thirty-seven and one-half (37 1⁄2) hours and an average of five (5) days;
(b)	work seven and one-half (7 1⁄2) consecutive hours per day, exclusive of a one-half (1/2) hour meal period;
(c)	obtain an average of two (2) days of rest per week;
(d)	obtain at least two (2) consecutive days of rest at any one time, except when days of rest are separated by a designated paid holiday which is not worked; the consecutive days of rest may be in separate calendar weeks.
25.17	Except as provided for in clauses 25.22 and 25.23, the standard shift schedule is:
(a)	12 midnight to 8 a.m.; 8 a.m. to 4 p.m. to midnight;
	or alternatively
(b)	11 p.m. to 7 a.m.; 7 a.m. to 3 p.m.; 3 p.m. to 11 p.m.
25.23	Variable Shift Schedule Arrangements
(a)	Notwithstanding the provisions of clauses 25.05 and 25.13 to 25.22 inclusive, consultation may be held at the local level with a view to establishing shift schedules which may be different from those established in clauses 25.13 and 25.17. Such consultation will include all aspects of arrangements of shift schedules.
(b)	Once a mutually acceptable agreement is reached at the local level, the proposed variable shift schedule will be submitted at the respective Employer and Alliance Headquarters levels before implementation.
(c)	Both parties will endeavour to meet the preferences of the employees in regard to such arrangements.
(d)	It is understood that the flexible application of such arrangements must not be incompatible with the intent and spirit of provisions otherwise governing such arrangements. Such flexible application of this clause must respect the average hours of work over the duration of the master schedule and must be consistent with the operational requirements as determined by the Employer.
(e)	Employees covered by this clause shall be subject to the Variable Hours of Work provisions established in clauses 25.24 to 25.27, inclusive.

Terms and Conditions Governing the Administration of Variable Hours of Work

25.24	The terms and conditions governing the administration of variable hours of work implemented pursuant to clauses 25.09, 25.10 and 25.23 are specified in clauses 25.24 to 25.27, inclusive. This Agreement is modified by these provisions to the extent specified herein.
25.25	Notwithstanding anything to the contrary contained in this Agreement, the implementation of any variation in hours shall not result in any additional overtime work or additional payment by reason only of such variation, nor shall it be deemed to prohibit the right of the Employer to schedule any hours of work permitted by the terms of this Agreement.
25.26
(a)	The scheduled hours of work of any day as set forth in a variable schedule specified in clause 25.24, may exceed or be less than seven and one-half (7 1⁄2) hours; starting and finishing times, meal breaks and rest periods shall be determined according to operational requirements as determined by the Employer and the daily hours of work shall be consecutive.
(b)	Such schedules shall provide an average of thirty-seven and one-half (37 1⁄2) hours of work per week over the life of the schedule.

(i)	The maximum life of a shift schedule shall be six (6) months.
(ii)	The maximum life of other types of schedule shall be twenty-eight (28) days, except when the normal weekly and daily hours of work are varied by the Employer to allow for summer and winter hours in accordance with clause 25.10, in which case the life of a schedule shall be one (1) year.
(iii)	The maximum life of a schedule for Officers working for the Canadian Pari-Mutuel Agency shall be one (1) year.

(c)	Whenever an employee changes his or her variable hours or no longer works variable hours, all appropriate adjustments will be made.
25.27	Specific Application of this Agreement

For greater certainty, the following provisions of this Agreement shall be administered as provided herein:

(a)	Interpretation and Definition (clause 2.01)
	"Daily rate of pay" - shall not apply.
(b)	Minimum Number of Hours Between Shifts
	Paragraph 25.14 (a), relating to the minimum period between the termination and commencement of the employee's next shift, shall not apply.
(c)	Exchange of Shifts (clause 25.21)
	On exchange of shifts between employees, the Employer shall pay as if no exchange had occurred.
(d)	Overtime (clauses 28.06 and 28.07)
	Overtime shall be compensated for all work performed in excess of an employee's scheduled hours of work on regular working days or on days of rest at time and three-quarters (1 3⁄4).
(e)	Designated Paid Holidays (clause 30.08)

(i)	A designated paid holiday shall account for seven and one-half (7 1⁄2) hours.
(ii)	When an employee works on a Designated Paid Holiday, the employee shall be compensated, in addition to the pay for the hours specified in sub-paragraph (i), at time and one-half (1 1⁄2) up to his or her regular scheduled hours worked and at double (2) time for all hours worked in excess of his or her regular scheduled hours.

(f)	Travel
	Overtime compensation referred to in clause 32.06 shall only be applicable on a work day for hours in excess of the employee's daily scheduled hours of work.
(g)	Acting Pay
	The qualifying period for acting pay as specified in paragraph 64.07(a) shall be converted to hours.

Work Performed on a Designated Holiday

30.08
(a)	When an employee works on a holiday, he or she shall be paid time and one-half (1 1⁄2) for all hours worked up to seven and one-half (7 1⁄2) hours and double (2) time thereafter, in addition to the pay that the employee would have been granted had he or she not worked on the holiday.

ARTICLE 64
PAY ADMINISTRATION

64.01	Except as provided in this Article, the terms and conditions governing the application of pay to employees are not affected by this Agreement.
64.02	An employee is entitled to be paid for services rendered at:
(a)	the pay specified in Appendix "A", for the classification of the position to which the employee is appointed, if the classification coincides with that prescribed in the employee's certificate of appointment;
	or
(b)	the pay specified in Appendix "A", for the classification prescribed in the employee's certificate of appointment, if that classification and the classification of the position to which the employee is appointed do not coincide.

FACTS

[3]      The facts in this case are not in dispute and can be shortly stated. The three grievors, each of whom had been previously engaged as a corrections officer with the Department of Correctional Services, were taken on early in 1999 by the Department of Justice to act as firearms officers in the newly established Canadian Firearms Center (CFC) in Miramichi, New Brunswick. Their principal job duties were the processing and approval of firearms licenses and transfers of firearms ownership. This requires review and assessment of individual applicants against the Canadian Firearms Registration System (CFRS) and the Canadian Police Information Centre (CPIC) using sophisticated computer programs. Applications can be made on-line or by telephone. Because the CFRS is an integrated national program, the entire country being serviced through CFC Miramichi, the operation works on a seven-day shift basis, 8 a.m. to 12:30 a.m. during the week, and 9:30 a.m. - 10:00 p.m. on the weekends, this pursuant to a VSSA, according to article 25.23 between the parties.

[4]      The Board heard testimony as to the scheduling of work and pay administration both from the grievor Danny Breau and from two managerial personnel: Kathy Nicol, Manager of Compensation and Staff Relations for Justice Canada, stationed in Ottawa, and Lee Stever, Operations Manager at CFC Miramichi. Firearms officers are scheduled to work on a six-week roster system with variable work hours per week designed to total 225 hours over the six-week period. This averages out at 37.5 hours per week, 7.5 hours per day over the six-week period as stipulated at articles 25.13 (a)(b) and 25.26 (b). The grievors were scheduled on a 4/4 basis, i.e. four shifts on and four shifts off, the shifts being of varying durations: 12 hour shifts (= 11 paid hours); 10 hour shifts (= 8.5 paid hours) and 8 hour shifts (= 7.5 paid hours). They were assigned to the duty roster in varying combinations of 12, 10 and 8-hour shifts staggered over the life of the roster (including an extra day off,) so as to ensure that within every six-week cycle they were scheduled to work a total of 225 hours.

[5]      As is well known, the government pay administration system provides annually for twenty-six by-weekly paycheques, the individual employee's compensation calculated at his or her classification rate x 37.5 hours x 2 i.e. two weeks' pay calculated at the normal rate of pay, for the normal work week (37.5 hours) and the normal work day (7.5 hours) as stipulated in the collective agreement here at issue at article 25.06. The payroll system is centralized and each by-weekly paycheque represents compensation for the 75 hours worked the previous two weeks (2 x 37.5). Any premium pay, e.g. overtime, shift premiums, acting pay, designated paid holiday pay, etc., is calculated separately and individually with regional input and then issued and paid by a separate supplemental paycheque ordinarily issued together with the regular bi-weekly paycheque. In calculating a supplemental paycheque, the employer converts the number of premium hours worked into the equivalent number of hours if worked at straight time e.g. 7.5 hours paid at time and one-half is equivalent to 11.25 hours worked at straight time (7.5 x 1.5 = 11.25); 10 hours worked at time and one-half is equivalent to 15 hours worked at straight time (10 x 1.5 =15); 11 hours worked at time and one-half is equivalent to 16.5 hours worked at straight time (11 x 1.5 = 16.5). The conversion from premium to straight time hours is reflected in the supplemental paycheque stub issued to the employee (Exhibit no. 3 (b)).

[6]      The VSSA does not alter the basic framework of the employer's pay administration system: 26 bi-weekly paycheques, each representing 75 hours worked in the previous two-week period, are issued to each employee who participates in the VSSA (the regular paycheque). However, in point of fact no employee participating in the VSSA actually works the 75 hours in the previous two-week period which the regular bi-weekly paycheque represents. Rather, depending on the individual's scheduling on the duty roster, the employee may work more than 75 hours in any two-week period, or less than 75 hours in any two-week period, but never precisely 75 hours as would be the ordinary case absent the VSSA for employees working normal workdays in a normal work week. Nevertheless, as already noted, a VSSA employee works 225 hours, averaged out over the six-week period of the roster cycle, the same number of hours which a normally scheduled employee works in that six-week period. This is reflected in the three regular bi-weekly paycheques issued to the VSSA employee, no one of which corresponds to the hours actually worked in the preceding two weeks, but the totality of which corresponds to the hours actually worked over the six-week cycle.

[7]      Where, as here, a VSSA employee works on a designated paid holiday, the employer calculates the supplemental paycheque representing the shift premium to which the employee is entitled according to article 25.27 (e)(ii), by reference to the actual regularly scheduled hours worked by the employee on that day (7.5, 8.5 or 11 hours). Where the hours worked exceed the 7.5 hours which account for a designated paid holiday as stipulated at 25.27 (e)(i), the employer sets off what it considers excess hours paid already in the regular bi-weekly paycheque at straight time, against the total number of regularly scheduled hours worked that day, converted from overtime to straight time hours, so as to arrive at the amount owing by way of a supplemental premium paycheque.

[8]      Thus for example, in the case of the grievor Danny Breau, who worked an 11-hour shift on January 1, 2001, a designated paid holiday, the employer calculated the amount owing by way of a supplemental premium paycheque per article 25.27 (e)(ii) converted to straight time hours as follows:

Entitlement
	7.5	hours straight time (according to 27.25 (e)(i))
	16.5	hours at straight time (according to 27.25 (e)(ii) = 11 x 1.5 premium hours)
Total:	24	hours at straight time
	- 11	hours at straight time in regular bi-weekly paycheque (7.5 + 3.5 = 11)
Owing:	13	hours at straight time to be paid by supplemental paycheque.

SUBMISSIONS

Argument for the Grievor

[9]      For the grievors, Mr. Tynes argues that the employer has failed to compensate the grievors properly for hours worked on a paid holiday. It has set off against the 16.5 equivalent straight time hours for which the grievors were entitled to be paid by way of premium pay (11 x 1.5 = 16.5), the 3.5 hours for which the grievors were paid by way of regular bi-weekly paycheque but which are in excess of the 7.5 hours which comprise a designated paid holiday according to article 25.27 (e)(i) (11 - 3.5 = 7.5). In doing so, the employer has in effect deprived the grievors of 2.33 of the 11 regularly scheduled hours worked at time and one-half to which they were entitled according to article 25.27 (e)(ii), (2.33 x 1.5 =3.5) paying the grievor only 8.66 hours at that rate (8.66 x 1.5 =13) or a total of 13 converted hours at straight time, when 16.5 converted straight time hours were owed.

[10]      In support of their position, the grievors plead the decision of the PSSRB in King and Treasury Board (Revenue Canada - Customs and Excise) (1999) CPSSRB No. 110; (1999), 36 PSSRB Decision 11 (Board Member Simpson). There, on language effectively on all fours with that here under consideration, the adjudicator rejected a similar argument put forward by the employer in support of its method of calculating premium pay entitlement under a VSSA. She directed that the grievor King be paid in addition to his regular bi-weekly paycheque for the two-week period in which the designated paid holiday fell, premium pay at time and one-half for the total number of hours worked on the holiday, in that case 8.57 hours. King's additional entitlement was to premium pay calculated at 12.855 hours straight time (8.57 x 1.5 =12.855). That decision was upheld by the Federal Court on judicial review in Canada (Attorney General) v. King [2000] SCJ No. 1987 [TD], appeal dismissed [2000] FCJ No. 673; 2002 FCA 178 [CA]. Mr. Tynes submits that the employer is seeking here to relitigate an issue conclusively settled by the King decision. The matter is res judicata. The grievances should be sustained and the grievors compensated for wages lost by reason of the employer's improper set-off of wages earned.

Argument for the Employer

[11]      For the employer, Mr. Fader argues that the grievors' claim, premised on the variation in hours worked under the VSSA on an 11-hour shift is, in effect, a claim for "additional payment by reason only of such variation", an outcome specifically precluded by the provisions of article 25.25. The parties are in agreement that the designated paid holiday accounts for 7.5 hours according to article 25.27 (e)(i) and that in addition to pay at straight time for those hours, the grievors are to be paid at time and one-half for the eleven regularly scheduled hours worked, which is equivalent to 16.5 hours at straight time (11 x 1.5 =16.5). The grievors agree with the employer that their pay entitlement for an 11-hour shift worked on a designated paid holiday is 24 hours at straight time (7.5 hours + 16.5 hours =24). But the grievors received, in their regular bi-weekly paycheque, designated paid holiday pay for the full 11 hours of the shift, i.e. 3.5 hours in excess of that to which they were entitled. To pay them in addition by way of supplemental premium paycheque an amount equal to the 11 regularly scheduled hours worked at time and one-half (=16.5 hours straight time) would result in total compensation of 27.5 hours at straight time (11 + 16.5 = 27.5), 3.5 hours straight time in excess of that to which the grievors agree they are entitled. The only question to be determined is whether the grievors received their converted premium pay entitlement of 16.5 hours straight time for a designated paid holiday on which they worked their regularly scheduled 11-hour shift. Clearly they have received that entitlement: 13 hours straight time as reflected in the supplemental premium paycheque; and 3.5 straight time hours as reflected in their regular bi-weekly paycheque, which had not been adjusted to reflect the designated paid holiday as accounting for only 7.5 rather than 11 hours (11 - 7.5= 3.5). The grievors fail to recognize that the full premium pay entitlement has been disbursed, although in two separate cheques. The collective agreement reserves to the employer, unless specifically provided otherwise, managerial control over its pay administration system, (article 64.01), and to insist on payment of all premium pay earned in the supplemental premium paycheque would, in light of the manner in which the regular bi-weekly paycheque is issued, result in a windfall to the grievors to which they are not entitled.

[12]      The employer takes the position that the decision in King is inapplicable on the facts, as there the finding of fact was that the grievors' regular bi-weekly paycheque included pay only for 7.5 hours on the designated paid holiday as stipulated in provisions identical to article 25.27(e)(ii). Thus, there were no excess hours paid in the regular paycheque which had to be set off against the total of regularly scheduled hours worked on the designated paid holiday. Alternatively, to the extent that King can be said to be a case on all fours with that here, the Board ought not to follow it. The matter is not res judicata, nor does the doctrine of stare decisis apply in the arbitral forum - Re International Union of Electrical Workers & Canadian General Electric Co. Ltd. (1959), 9 LAC 342 [Laskin]. Moreover, in Essex County Roman Catholic School Board v. Ontario English Catholic Teachers' Association [2001] OJ No. 3602; 56 OR(3d) 85, the Ontario Court of Appeal has held that where an arbitrator's decision is upheld against a review standard of patent unreasonableness, this is neither determinative of the meaning of the provision in dispute, nor binding upon other arbitrators. More than one interpretation of the disputed provision may be reasonable. The Board ought not to adopt the reasoning of the King decision simply to promote consistency in outcomes; rather it should reach its conclusion based upon the language of the agreement properly applied as it was here by the employer. Its calculations compensated the grievors fully for the 11 regularly scheduled hours worked at time and one-half on a designated paid holiday. These grievances should be dismissed.

DECISION

[13]      Res judicata and the related doctrine of issue estoppel are sometimes raised as preliminary objections to the arbitrability of a matter. Here however, neither party challenges my jurisdiction to entertain these grievances and although the rubric of res judicata was used in argument, the actual substance of the argument put forward went to the degree, if at all, that I should defer to the decision of the adjudicator in King, a case parallel on the facts but involving different grievors and a different, although related, collective agreement between these same parties. It is generally accepted that to deny the persuasive force of previous decisions made in similar fact circumstances and calling for the interpretation of the same or closely related collective agreement terms between the same parties would wholly undermine those values universally accepted as essential to any rational system of third-party dispute resolution: certainty, uniformity, stability and predictability. On the other hand, neither justice nor equity are to be sacrificed to these values as in our collective bargaining regime, absent a jurisdictional challenge, an arbitrator or adjudicator is statutorily bound to adjudicate a dispute upon its merits. Indeed, to do otherwise by blindly adopting the reasons for decision given in a previous dispute could arguably be viewed as an improper declining of jurisdiction.

[14]      The view early expressed by Judge Lane in Re United Automobile Workers and L. A. Young Ltd. (1958), 8 LAC 196, that an arbitrator "is bound to follow even a wrong decision of a former arbitrator" (at 197) failed to gain acceptance, and even prior to its articulation we find these oft-cited words. "It is not good policy," wrote the then Professor Laskin,

"for one Board of Arbitration to refuse to follow the award of another Board in a similar dispute between the same parties arising out of the same Agreement where the dispute involves the interpretation of the Agreement. Nonetheless, if the second Board has the clear conviction that the first award is wrong, it is its duty to determine the case before it on principles that it believes are applicable."

That was in Re Brewer's Warehouse Co. Ltd. and International Union of Brewery, Flour, Cereal, Malt Yeast, Soft Drink and Distillery Workers, Local 278 C (1954), 5 LAC 1797 at 1798.

[15]      The entire subject of res judicia, issue estoppel and stare decisis in the arbitral forum has been much discussed in decisions and commentaries often difficult to reconcile with one another. Two early discussions - clear, lucid and thorough - have withstood the test of time. The first is that of Arbitrator Weatherhill in an editorial note found at (1958) 8 LAC 323 ff. and the second is the decision of Arbitrator Swan in Re Phillips Cables Ltd. and United Electrical, Radio and Machine Workers, Local 510 (1978), 16 LAC(2d) 225. In the latter, the principle of arbitral deference to an earlier award is quite aptly stated to rest in 'comity and public policy' (at p. 232) rather than in some immutable principle of law: it is to guide but never dictate in decision making.

[16]      None of this is altered by an intervening curial decision by way of judicial review which upholds the integrity of the earlier award against the patently unreasonable/ clearly irrational standard, as is the case here before me. This is the teaching of the Ontario Court of Appeal in the Essex County RC School Board case. There, the Divisional Court had quashed an Arbitrator's award as patently unreasonable for failure to follow a decision of the Court of Appeal upholding an earlier award to the contrary on application for judicial review. Justice MacPherson, speaking for the full bench in reversing the Divisional Court, wrote:

"There is a fundamental difference in judicial review proceedings between the correctness and patently unreasonable standards of review. Where a decision of an arbitrator (or an administrative tribunal) is reviewed on the standard of correctness, the court's decision on judicial review will determine the "correct" interpretation - i.e., the only interpretation. The implications of the court's decision will be, looking backward, the resolution of any conflicts among previous decisions of arbitrators and, looking forward, the existence of a clear binding precedent to be followed by all arbitrators in future cases.

Where a decision of an arbitrator is reviewed on the standard of patently unreasonable, the effect of the court's decision is entirely different. All the reviewing court decides is whether the challenged award is patently unreasonable. In deciding that issue, the court does not decide whether the award was the only possible award or the best possible award: see United Brotherhood of Carpenters & Jointers of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316 at p. 341, 102 D.L.R. (4th) 402, per Sopinka J. Thus, if the court determines that the award was not patently unreasonable, it does not follow that, looking backward, conflicts in the arbitral jurisprudence are necessarily resolved or, looking forward, arbitrators will be bound to apply the interpretation of the arbitrator whose decision was affirmed by the court in the judicial review proceedings." [paras. 29-30]

That said, the reasons for decision of a court on judicial review may assist in an arbitrator's assessment of the integrity of an earlier award which a party urges ought not to be followed. Moreover, the fact that the earlier award has withstood the 'patently unreasonable/clearly irrational' standard of review cannot but have some relevance to the 'clear conviction' standard against which the second arbitrator measures the integrity of the first award to determine whether it was wrongly decided. I turn now to the reasoning of the adjudicator in King.

[17]      In King precisely the same argument was made by the employer as was made here before me - and indeed counsel made frequent reference to the employer's written submissions in that case, which are reproduced in the decision of the adjudicator. There, Board Member Simpson dismissed the employer's "convoluted process of adding and subtracting" as unnecessary (at para 26). The key to her analysis of the governing collective agreement language, equivalent in effect to that found here at article 25.27 (e)(i)(ii), is found in the following paragraphs:

"Mr. King's regular pay for the day is his hourly rate multiplied by 7.5 hours as provided for in his collective agreement for his classification and range. This is not essentially changed by the V.S.S.A. All the V.S.S.A. does is vary the 7.5 daily hours by spreading the hours over fewer days so that each employee works a regularly scheduled shift of 8.57 hours. This allocation of hours is for convenience sake, as expressed in the V.S.S.A. The employee is still paid every two weeks at his hourly rate for 7.5 hours a day as if he had worked these hours in that manner. The fact that he actually works a shift (8.57 hours) which is 1.07 hours longer than a normal 7.5-hour day makes no difference to his actual compensation. He is paid for 75 hours work every two weeks.

Whether or not he works on a designated paid holiday, he is paid the same base amount for a two-week period in which a designated paid holiday occurs as in a two-week period in which no holiday occurs, i.e. 75 hours, continuing the fiction recognized in the V.S.S.A of the employee working 7.5 hours daily over a 10-day period, even though he actually works 8.57 hours over a shorter period of time.

This is quite clear. Even though an employee works more than a 7.5-hour shift on a regular working day (or on a designated paid holiday), the pay he receives for 75 hours work is as if he worked 7.5 hours in 10 working days over the two-week period. Similarly, if a designated paid holiday occurs in a two-week period and he takes the holiday (does not work), he gets the same pay. Breaking it down, the regular pay for the day: 7.5 hours x his hourly rate, or 1/10 of 75 hours because this is the basic "fiction" of the V.S.S.A.

There is no problem at this stage. He simply gets his regular pay for the day or, in other words, he gets the same pay at the end of a two-week period whether he is entitled to a holiday (designated paid holiday), which occurs in the period, or is working a two-week period in which there is no holiday. He gets this even though he does not work on the holiday. The only issue is the premium pay he is entitled to if he works 8.57 hours on a designated paid holiday.

Mr. King is entitled to be paid his regular pay for the two-week period in which the Canada Day holiday occurred (7.5 hours on the designated paid holiday as explained above). This he would get whether he worked or not. However, he did work 8.57 hours. Therefore, he is entitled to premium pay at time and one-half for a total of 12.855 hours (8.57 x 1.5 = 12.855 hours) for his work on the holiday in addition to his regular pay for the two-week period. [at paras. 19-22, 28].

[18]      This reasoning found favour with the Motions Judge who, in dismissing the employer's application for judicial review, wrote:

"It is beyond dispute that the practical operation of the employment agreements in question relies on a fiction. The fiction is that the Respondent, and other employees in his situation, works a regular work day of 7.5 hours, when in reality he works 8.57 hours. His pay is calculated on the basis of the usual 37.5 hour work week. The fiction is relied upon in the calculation of ordinary straight pay and in my opinion, must equally be relied upon in the calculation of premium pay in accordance with the collective agreement. This means that the appropriate credit to be deducted in favour of the Employer is 7.5 hours, not 8.57 hours as submitted by the Applicant. This is the conclusion reached by the Adjudicator.

The flaw in the approach adopted by the Applicant is that the Respondent indeed receives pay for 1.07 hours above the regular 7.5 hours in his bi-weekly pay cheque. This is because he works on the basis of 8.57 hours on any given day and is paid for his labour. However, he receives the same hourly rate as if he worked 7.5 hours a day. He receives no more nor less than the employee who is not subject to variable shift scheduling." [at paras. 20, 22].

I agree. Far from being of 'the clear conviction that the first award is wrong', I am of the view that Board Member Simpson was correct in her interpretation of the equivalent collective agreement terms governing premium pay for work performed on a designated paid holiday.

[19]      It is important to recognize that any VSSA is entered into by mutual agreement and, because it comprises a derogation from the ordinary terms and conditions governing shift scheduling, it must be read closely so as to ensure that its application does not alter the rights and obligations of the parties beyond their intention. This is the thrust of subparagraph 25.23 (d) which underscores that flexible application of the VSSA "must not be incompatible with the intent and spirit of provisions otherwise governing such arrangements" and further "must respect the average hours of work over the duration of the master schedule and must be consistent with the operational requirements as determined by the Employer". It is clear then that the interests of both employees and employer in pursuing a VSSA must not be allowed to do so at the undue expense of either. On the one hand, employees accommodate the operational requirements of the employer by agreeing to the implementation of shift schedules which might exceed or fail to attain the normal daily or weekly hours of work. On the other hand, the employer respects in a global sense the mandatory ceiling imposed on its right to schedule by ensuring that over the duration of a VSSA cycle, the total number of hours scheduled will average out at the normal daily and weekly hours of work stipulated - 7.5 and 37.5 hours respectively.

[20]      Superimposed on a VSSA is the employer's pay administration system. This, for reasons both of efficiency to the benefit of the employer, and of the equity to the benefit of the employee, is premised on a rigid shift schedule model: the normal 7.5 hour work day in the normal 37.5 hour work week. The implementation of such a pay administration scheme by the payment annually of 26 bi-weekly paycheques representing 75 hours worked at the employee's wage rate is clearly efficient. It is also equitable, guaranteeing a steady, consistent and predictable bi-weekly income to the employee. Neither party desires to sacrifice the values of efficiency and equity inherent in this rigidly consistent pay administration system by forcing it to adjust to the flexible profile of a VSSA. Rather, the VSSA has been tailored to dovetail with the structure of the pay administration system, although not on a daily, weekly or even bi-weekly basis, but instead on a weekly cycle of greater duration, in the instant case a six-week cycle. Within that cycle, the parties have established flexible schedules of work compatible with the objectives of each, which can be fitted into the employer's more rigidly structured pay administration system. The result is the "fiction" adverted to both by the adjudicator and by the Motions Judge in King: although paid by regular bi-weekly paycheque premised on a 7.5 hour work-day and a 37.5 hour work-week, an employee scheduled under a VSSA in fact works sometimes in excess of, and sometimes less than, those hours. In contrast to the employee scheduled to work the normal 7.5 hours per day, 5 days per week, whose bi-weekly paycheque represents precisely the number of hours actually worked (75), the paycheque of the VSSA scheduled employee represents 75 notional hours worked in any two-week period. However, cumulatively, three bi-weekly paycheques do represent for the VSSA employee the actual number of hours worked in the preceding six weeks, as is of course the case for the normally scheduled employee.

[21]      By way of contrast, however, the VSSA scheduled employee, as his or her regularly scheduled counterpart, is paid any premium pay earned on the basis of premium paid hours actually worked. This accounts for the provisions of article 25.27 which adjusts the threshold beyond which premium rates are payable from the normal hours of work as is ordinarily applicable, to the regularly scheduled hours of work provided by the VSSA. Such adjustments ensure, according to article 25.25, that "[t]he implementation of any variation in hours shall not result in any additional overtime work or additional payment by reason only of such variation.".

[22]      It is against this background that the provisions of article 25.27 (e) as it affects remuneration for work performed on a designated paid holiday must be read. For the sake of convenience, I reproduce here once again its provisions and those of article 30.08(e):

25.27 Specific Application of this Agreement

For greater certainty, the following provisions of this Agreement shall be administered as provided herein:

(e)	Designated Paid Holidays (clause 30.08)

(i)	A designated paid holiday shall account for seven and one-half (7 1⁄2) hours.
(ii)	When an employee works on a Designated Paid Holiday, the employee shall be compensated, in addition to the pay for the hours specified in sub-paragraph (i), at time and one-half (1 1⁄2) up to his or her regular scheduled hours worked and at double (2) time for all hours worked in excess of his or her regular scheduled hours.

Work performed on a Designated Holiday

30.08

(a)	When an employee works on a holiday, he or she shall be paid time and one-half (1 1⁄2) for all hours worked up to seven and one-half (7 1⁄2) hours and double (2) time thereafter, in addition to the pay that the employee would have been granted had he or she not worked on the holiday.

[23]      Absent article 25.27 (e), a VSSA employee would be entitled to the benefit granted at article 30.08(a) just as the normally scheduled employee, including double time for those hours worked in excess of the 7.5 hours paid at time and one-half, the normal daily work hours. But a variable shift is not to result in additional overtime work, which would be the case if the overtime work threshold were the 7.5 hours of the normal daily schedule. Article 25.27 (d), which addresses overtime generally, makes this clear by elevating the threshold for entitlement to overtime pay to the employee's VSSA scheduled hours of work, and this at time and three-quarters (1.75). In order to integrate the provisions of article 30.08 (a) as to compensation for work performed on a designated holiday, which is premised on the normal 7.5 hour day, adjustments have been made to ensure that, as is the case with overtime generally, the threshold for payment at the premium rate for the VSSA employee is his or her regularly scheduled hours worked, rather than the normal 7.5 hour work-day. This is accomplished by the second half of article 25.27(e)(ii) which provides that the VSSA employee, as his or her normally scheduled counterpart, is paid at time and one-half for all regularly scheduled hours actually worked, and at double time only for those hours worked in excess thereafter.

[24]      Article 25.27(e)(i), combined with the first half of subparagraph (ii), is equivalent to the phrase "in addition to the pay the employee would have been granted had he or she not worked on the holiday" found in the second half of article 30.08(a). In short, any employee who works on a designated paid holiday continues to be entitled to be paid the amount the employee would have been paid in any event had he or she not worked that day. In the case of all employees, this is equivalent to 7.5 hours straight time, for the normally scheduled employee representing 7.5 hours actually worked on any day; and for the VSSA employee representing 7.5 hours notionally worked on any day. In the case of both, this amount is included in the regular bi-weekly paycheque.

[25]      The fallacy in the employer's 'convoluted process of adding and subtracting' is that it has taken 3.5 straight time hours' worth of compensation paid by way of regular bi-weekly paycheque, calculated on notional hours worked - i.e. 7.5 hours daily, 37.5 hours weekly and 75 hours bi-weekly - and attributed those hours to compensation earned at the premium rate for actual hours worked on the designated paid holiday, reducing the supplemental paycheque accordingly. But one cannot juxtapose notionally worked hours against actually worked hours in this fashion without reducing the total compensation to which a VSSA scheduled employee is entitled for work performed on a designated paid holiday. Although superficially attractive when a designated paid holiday is viewed in isolation from the six-week cycle of the variable shift schedule, such attribution has one of two unintended effects.

[26]      If viewed from the perspective of the regular bi-weekly paycheque, although 225 hours have actually been worked, in the six-week cycle, the employer's calculation improperly reduces from 225 to 221.5 the number of hours actually worked for which compensation is received. Compensation for the remaining 3.5 hours has been attributed to premium paid hours actually worked on the holiday. In effect, the VSSA employee is short 3.5 hours pay from his or her regular paycheque. Viewed from the other perspective, such attribution has the effect of reducing the number of actual hours worked at the premium rate from 11 to 8.66 hours (11 x 1.5 = 16.5 hours straight time; 8.66 x 1.5 = 13 hours straight time), and the VSSA employee is short 2.33 premium rate hours pay from his or her supplemental premium paycheque (2.33 x 1.5 = 3.5 hours straight time).

[27]      The matter may be viewed from yet another perspective. In any six-week cycle in which a VSSA scheduled employee actually works an 11-hour shift on a designated paid holiday, he or she would be entitled to be paid for 225 straight time hours actually worked in the preceding six weeks by way of three regular bi-weekly paycheques, each representing 75 hours notionally worked in the preceding two weeks. In addition, the employee would be entitled to 16.5 converted premium pay hours by way of supplemental premium paycheque representing the 11 hours actually worked on the designated paid holiday. The VSSA employee is entitled to be paid for a total of 241.5 straight time hours over the six-week period. By the employer's reckoning, such an employee receives a supplemental premium paycheque of only 13 converted premium paid hours for a total of 238 straight time hours over a 6-week period. The VSSA scheduled employee is short 3.5 hours straight time pay to which he or she is entitled. In short, however viewed, the effect of setting off money paid for notional hours worked in any two-week period of the six-week cycle, against money paid for actual hours worked on a designated paid holiday, deprives the VSSA scheduled employee of the compensation to which he or she is entitled by the provisions of article 25.27 (e)(i)(ii): 7.5 hours paid at straight time plus 11 hours paid at the premium rate of time and one-half.

[28]      All of the foregoing leads me to conclude that these grievances must be sustained. For any two-week payroll period in which the grievors have worked on a designated paid holiday, they are entitled to be paid in addition to the amount included in their regular bi-weekly paycheques, premium pay calculated at the number of regularly scheduled hours worked at time and one-half, and at double time for all hours worked in excess of such regularly scheduled hours. The employer is directed to compensate the grievors in the amount owing by reason of its failure to compensate them fully for work performed on a designated paid holiday as here directed.

[29]      These grievances are sustained. I remain seized of this matter for purposes of implementation only.

Thomas Kuttner, Q.C.
Part-Time Board Member

Dated at Fredericton, New Brunswick, this 29^th day of July 2003.