FPSLREB Decisions

Introduction

1         The Ship Repair Chargehands and Production Supervisors Group is a bargaining unit represented by the Federal Government Dockyard Chargehands Association (the “Bargaining Agent” or “the Association”) at the Department of National Defence’s Fleet Maintenance Facility (FMF) Cape Scott in Halifax, Nova Scotia. The bargaining unit includes positions which are involved in the leadership of the repair, modification and refitting of naval vessels and their equipment. These Chargehands or Production Supervisors are responsible for the planning, allocation, co-ordination and assessment of the effectiveness of the resources involved in the repairs, modifications and refits just mentioned. It is fair to say that without the knowledge, skills, abilities and experience of these employees, and their counterparts on the West Coast (Victoria, B.C.), the Royal Canadian Navy could not be kept afloat as an effective security and defence force.

2         The current round of collective bargaining between the Association and representatives of the Treasury Board of Canada (“Treasury Board”), the formal Employer of personnel in the Department of National Defence, began in December 2010, prior to the expiry of the last collective agreement on March 31, 2011. The parties signed a Memorandum of Agreement on December 23, 2010, but the members of the bargaining unit, voting over two days on January 6 and 13, 2011, rejected the Memorandum of Agreement. On September 15, 2011 the parties met again and exchanged proposals. Negotiations occurred over October 17, 18 and 19, 2011, at which time agreement in principle was reached in relation to some articles. Negotiations continued on November 30 and December 1, 2011. A number of items remained unresolved and the parties determined that these outstanding issues should go to arbitration.

Issues and Procedure

3         By letter of December 12, 2011 to the Registrar of the Public Service Labour Relations Board, the Bargaining Agent requested arbitration in relation to the Ship Repair Chargehands and Production Supervisors – East Group (SR-C). It included a list of the terms and conditions which it wished to refer to arbitration. These were:

By letter of January 12, 2012 to the Dispute Resolution Services Co-ordinator of the PSLRB, the Treasury Board, as the Employer, agreed that an impasse had been reached in collective bargaining and sought the establishment of an arbitration board as well.

4         The Employer had a counter-proposal on rates of pay for economic increase which was expressed as follows:

The Employer also proposed changes to the severance pay provisions of the expired collective agreement which would impact on rates of pay. In essence, the Employer proposed to eliminate severance pay for voluntary severances (removing Article 14.03 on resignation and Article 14.04 on retirement), while maintaining it for death (Article 14.05), reasons of incapacity (Article 14.06) and lay off (Article 14.02). Amendments were also proposed to improve eligibility for severance pay in relation to lay-off (Article 14.02), and additions were proposed in relation to transfers to separate agencies listed in the Financial Administration Act (new Article 14.08), calculation of severance termination amounts (new Article 14.09), and options for payment of severance amounts and their selection (new Articles 14.10 and 14.11). Recognizing that elimination of severance pay on resignation and retirement constituted loss of an economic benefit, the Employer then proposed a total annual rate of pay as follows, showing how it would modify the “economic increase” figures mentioned above:

Finally, the Employer proposed to reduce overtime compensation in Article 6.09 of the expired collective agreement from “double time” to “time and a half” for periods over 8 hours and less than 16 hours, and from “triple time” to “double time” for work in excess of 16 hours in any 24-hour period.

5         In the absence of agreement by the bargaining agent nominee, Howard Goldblatt and the employer nominee, Jock Climie, as to a chair for the arbitration board, the Chairperson of the Public Service Labour Relations Board (PSLRB), Casper M. Bloom,  on March 1, 2012 appointed Bruce Archibald to be chair of the Arbitration Board. On March 2, 2012 the Chairperson of the PSLRB, provided the terms of reference for the Arbitration Board under section 144 of the Public Service Labour Relations Act (“the Act”) essentially as described above in paragraphs 3 and 4. The PSLRB staff and Arbitration Board made arrangements for a hearing as soon as possible which, under the scheduling constraints of all involved, turned out to be August 22 and 23, 2012. Written submissions were provided by the parties to the Arbitration Board via the PSLRB staff in advance of the hearing, which allowed the hearing to proceed with great efficiency. Oral submissions were heard from the parties and completed at the hearing held in Halifax, Nova Scotia on August 22, 2012, obviating the necessity for a second day of hearing. The Arbitration Board was able to deliberate late on the day of August 22, 2012 and through subsequent correspondence. The parties also provided additional documentation to the Arbitration Board, at its request, after the date of the hearing.

Principles Governing the Board’s Decision

6         The legal principles governing this interest arbitration are not really in dispute. The Employer in its brief (p. 31) noted that “…the goal of arbitration is to replicate the result, as closely as possible, to that which would have been achieved had the parties negotiated a settlement.” The Bargaining Agent in its brief concurred with this “replication principle”, but added that the arbitration board is to replicate as closely as possible “…the agreement the parties would have reached if they had engaged in free collective bargaining with the right to resort to a work stoppage”: see Canadian Military Colleges Faculty Association v. Treasury Board, unreported, April 10, 1995 (Outhouse) and Thames Emergency Medical Services Inc. and OPSEU (2004), 129 L.A.C. (4th) 192 (Burkett). The Employer also asserted correctly that “…[a]nother feature of interest arbitration is that it is an inherently conservative exercise” (Submission, p. 31). It quoted C. Rootham, Labour and Employment Law in the Federal Public Sector to the effect that “…as a general rule neither party should look for a major breakthrough from a third party neutral; that is reserved for negotiations”. The Association essentially agreed with this “conservatism principle”, but added a gloss as to context which shows the link between the replication and conservatism principles. The Bargaining Agent thus noted at para. 24 of its submission: “Arbitrators have found that employer proposals to eliminate longstanding entitlements, or to fundamentally alter collective agreements, contradict the principle of replication”: see Canadian Merchant Service Guild and Marine Atlantic, Inc., unreported, August 19, 2002 (Ashley); and Northumberland Ferries Limited and Canadian Merchant Service Guild, unreported, January 4, 2004 (Christie).

7         While these general principles are thus acknowledged to be in play for the purposes of this arbitration, it is clear that they have received statutory embodiment in section 148 of the Public Service Labour Relations Act, which reads as follows:

148.  In the conduct of its proceedings and in making an arbitral award, the arbitration board must take into account the following factors, in addition to any other factors that it considers relevant:

(a) the necessity of attracting competent persons to, and retaining them in, the public service in order to meet the needs of Canadians;

(b) the necessity of offering compensation and other terms and conditions of employment in the public service that are comparable to those of employees in similar occupations in the private and public sectors, including any geographic, industrial or other variations that the arbitration board considers relevant;

(c) the need to maintain appropriate relationships with respect to compensation and other terms and conditions of employment as between different classification levels within an occupation and as between occupations in the public service;

(d) the need to establish compensation and other terms and conditions of employment that are fair and reasonable in relation to the qualifications required, the work performed, the responsibility assumed and the nature of the services rendered; and

(e) the state of the Canadian economy and the Government of Canada’s fiscal circumstances.

The section does allow the Board the flexibility to look at the enumerated factors “in addition to any other factors that it considers relevant”. Thus the Board will examine the replication and conservatism principles in the light of the particular factors it is directed to consider by Section 148, as well as others which arise from the circumstances of the parties in this particular case.

8         In this case the issues in dispute are all inter-twined since they are components of the “total compensation package”. While the above principles and factors were separated out by the parties in relation to the four key issues of (1) economic increases, (2) the severance pay issue, (3) the overtime dispute, and (4) the self-directed team differential, all four issues were bound together, although differently, by each party in justifying their overall approaches. This Decision will nonetheless summarize the arguments of the parties in relation to these issues separately, making some evaluative comments, prior to reaching conclusions which will tie together the “compensation package” from a decisional perspective.

Argument on Rates of Pay

9         On rates of pay, the Employer gave priority to the factor in section 148(e) of the Act, that is, “the state of the Canadian economy and the Government of Canada’s fiscal circumstances”. It asserted that “compensation arrangements must be affordable and consistent with the broader objectives of sustainable finances and ongoing economic growth”. The Employer noted that “Consensus Economics” forecasters anticipate Canadian real GDP to increase by a modest 2.1% in 2012 and 2.2% in 2013. It also noted that the forecast unemployment rate for 2013 is 7.2% which is a full percentage higher than the pre-recession rate in 2008. Inflation rates are forecast at 2.1% in 2012 and 2% in 2013. Finally the Employer notes that the sovereign debt crisis in Europe, and problems in many countries, including the United States of America, characterized by fiscal austerity measures, as well as weakened consumer and investor confidence, has resulted in ongoing and deepening global economic weakness. In this context the Employer highlighted the Government of Canada’s medium-term fiscal plan which is to return to balanced budgets and a reduction of the debt to GDP ratio of 28.5 in 2016-17 (which is in line with levels before the 2008 recession). The Employer notes that the stimulus measures of the Government’s post recession “Economic Action Plan” have not been renewed, and that the most recent budgets have included measures to enhance tax integrity, restrain growth in defence spending, cap international assistance, and introduce a freeze on departmental operating budgets. The principle behind the latter is said to include a commitment to funding civil service compensation growth by corresponding reductions in other departmental budget expenditures. The Employer points to parallel civil service compensation restraint measures in other Provinces and Territories, with emphasis on steps being taken in Ontario and British Columbia, although mention was also made of the Nova Scotia government’s efforts to restrict civil service compensation growth to 1% per year in the near term.

10       As to the retention and recruitment factor mentioned in s. 148(a) of the Act, the Employer points to a modest increase in hiring (about four per year) over the last 5 years for an SR-C group which is now composed of about 75 to 80 people. However, the Employer’s data reveals that the “total hirings to total separation ratio” over the last 5 years has been less than 1.0 due entirely to voluntary separations. Despite this gradual attrition, the Employer concludes that “"the government is not having any issues with attracting high quality applicants” in the SR-C Group,  and that there are “no recruitment and retention problems” under current working conditions and compensation levels at FMF Cape Scott.

11       The Employer’s argument on pay rates then moved to “external and internal comparability” as one might characterize sections 148(b) and (c) respectively, although the subsections seem to overlap with respect to comparability among public sector employees. In any event, the Employer presented statistical evidence which tended to show that the SR-C Group has benefitted from higher salary increases over the period from 2000 to 2010 than those received on average by employees in the federal Core Public Administration (“CPA”). Furthermore, the Employer noted that in the same period the SR-C group in Halifax has had higher salary increases than the “Ship Repair West” group (SRW-MGTO) in Victoria, B.C. If those last examples are thought “External Comparators”, then the Employer raised what might be termed “Internal Comparators”. The Employer’s evidence here was intended to demonstrate that the SR-Group of chargehands in Halifax earn significantly more than the SR-E group represented by the Dockyard Trades Council whom they supervise, and that they are quite close in terms of salary to the supervisory GT7 Group, represented by the Public Service Alliance of Canada (PSAC) to whom they report. This state of affairs is regarded as appropriate by the Employer which asserts that the hefty raises sought by the Association will disturb this internal equilibrium in salary relationships.

12       The Employer then points to the pattern in recent federal public sector bargaining which it says represents an appropriate balance of factors under the replication and conservatism principles (and presumably section 148 of the Act). There are a number of CPA groups for which negotiated settlements followed the Treasury Board framework of 1.75% for 2011, 1.5% for 2012 and 2% for 2013. These included groups represented by the PSAC (PA, SV and EB groups) by the Professional Institute of the Public Service of Canada (PIPSC) (NR and SH groups), by the Canadian Military Colleges Faculty Association (UT group), by the Canadian Auto Workers (CAW) (two locals - Air Traffic and Radio Operations groups respectively), and by the Communications, Energy and Paper Workers Union (CEP) (the PR-NS group). In addition, there are a number of arbitration boards which have rendered decisions giving similar results: two were for groups represented by the Canadian Association of Professional Employees (CAPE) (the EC and TR Groups) while one was for a group represented by the International Brotherhood of Electrical Workers (IBEW) (the EL group which got a four year agreement with 1.5%, 1.75%, 1.5% and 2%). All these arbitration boards were chaired by Yvon Tarte, the well-respected former chair of the Public Service Staff Relations Board. All of them, as well, set the economic increases at 1.5% per year, but added adjustments because of the changes to the Severance Pay arrangements, which will be discussed below. The Employer urged the Board to adopt the federal government Treasury Board pattern of settlements as evidenced above for determining this arbitration involving the SR-C group at the Halifax dockyard. The Employer argued that the Association’s proposal for increases of 5% for each year of the agreement to be “excessive given the current economic environment and the established settlement patterns in the federal public service” (Submission, p. 30).

13       The Association’s proposal is for a total salary increase of 5% per year over the 3-year term of the agreement, which would represent “economic increases of 3% per year” and “an additional 2% per year in the event that the Board grants the Employer’s request for the elimination of severance pay and the decrease in overtime rates”. The Association supports its proposal for a 3% “economic increase” on the basis of evidence that the Consumer Price Index in Nova Scotia from 2011 to 2013 projects an average annual increase of 2.9%. The Association thus argues that the wage increase should protect dockyard chargehands from the effects of inflation, and that the Employer’s proposed increases fail to do this. As to the negotiated settlements in the federal public sector which reflect the Treasury Board’s position, the Association argues that the PSAC, which took the lead in establishing this pattern, was facing “looming lay-offs” and accepted the Employer’s wage offer in exchange for increased economic security for its members. The Association argues that its membership rejected the government’s 1.5% economic increases because they are secure in the knowledge that they cannot be laid off or replaced, given the country’s defence needs for the Navy fleet, and that the replication principle should bring them more significant increases.

14       In terms of “comparables”, the Association urges the Board to consider the fact that its chargehand members work alongside military Chief Petty Officers 2nd Class or Navy Lieutenants who have the same job descriptions, do the same work, but get paid significantly more (11% and 6.1% respectively). As to the potential for conceptually bumping up against the pay levels of the PSAC’s GT7 supervisors, the Association argues that this is the problem which the PSAC created for itself by accepting the “pattern” offer, and that the Board need not concern itself with the problem. As for the fact that the Association’s counter-parts in ship repair on the West Coast are behind the SR-C Group in Halifax, the Association believes that it should not be penalized because the Government’s Expenditure Restraint Act, 2009 had adverse consequences for the West Coast group as a result of the vagaries of collective bargaining schedules. Also, the Association noted that the West Coast group was slated to vote on a negotiated agreement at the time of the hearing (more on this below). Finally, the Association stressed section 148(d) which requires consideration of “fair and reasonable” compensation in relation to the “qualifications required, work performed, responsibility assumed and services rendered”. In this regard, the Association concludes that a 3% annual economic increase for its members over the 3-year term of the agreement is more than justified.

Argument on Severance Pay

15       On the severance pay issue, the Employer took umbrage at the Association’s characterizing the matter as the “elimination of severance pay”. The Employer was at pains to point out that it was proposing to eliminate “voluntary severance pay” only, and that severance pay would be retained for other forms of severance, as described above, and that in relation to those retained categories the method of accumulating severance pay rights would be beneficial to many, particularly the newer, members of the bargaining unit. With respect to external comparables under section 148 of the Act, the Employer asserts that its proposals on severance pay “…will bring federal public compensation in line with that of other public and private sector employers such as the Ontario Provincial Government and those subject to the Canada Labour Code” (Submission, p. 43). As to internal comparators, the Employer presented statistics in the form of a pie chart which indicated that out of a total population of 313,129 public servants 43% had accepted the severance proposals in the CPA, 36.7% had accepted as represented by the Canadian Forces and the RCMP, and 3.2% had accepted among the unrepresented executive group for a total of almost 82%. Of the other 18% or so, almost 14% have settlements pending under the jurisdiction of the Public Interest Commission, while the remainder are to be dealt with by arbitration. The Employer concludes that its proposals for elimination of voluntary severance payments are fair, in accordance with comparable settlements or decisions in other sectors and are required by current economic conditions and the Government’s fiscal constraints. The Employer furthermore asserts that its proposal for .75% in pay increase over 3 years, above the “economic increase”, the general pattern, will compensate for the loss of severance payments for those who resign or retire.

16       On the severance pay issue, the Association objects to its elimination without adequate compensation through a pay rate increase. The Association says the value of the severance pay upon resignation or retirement under current Article 14 is equal to one week’s wages for each year of service. It then reasons that one week’s wages is equal to about 2% of annual salary in any given year. However, the Association notes that the average age of its membership is quite high (half are eligible to retire within 5 years), and that given the severance pay is calculated at the time of retirement, it is actually worth more than 2% per year for those who take voluntary severance at the end of a long career of service. The Association argues that to eliminate voluntary severance allowances for this particular workforce is a radical change in the collective agreement which, in accordance with the principle of conservatism in interest arbitration, ought not to be undertaken lightly by this Board. If it is to be imposed, says the Association, it should only be done at a cost of 2% per year for the duration of the Collective Agreement. It is this calculation which leads the Association to the conclusion that this Board, in addition to a 3% per annum economic increase for inflation, should award an additional 2% per year were it to do away with the voluntary severance pay provisions of Article 14.

Argument on Overtime

17       The Employer’s submissions on the overtime issue were straight forward and to the point. Currently, as mentioned above, the SR-C Group in Halifax receives overtime under Article 6.09 of the Collective Agreement at double the regular rate for between 8 and 16 extra hours in a day, and triple the regular rate for time in excess of 16 hours of overtime in a 24-hour period (simplifying the language of Article 6.09 to some degree). The Employer’s proposal is to reduce those corresponding rates to time and a half and double time, respectively. The Employer cites the economic circumstances and governments fiscal situation as the first factor to justify this proposal. It refers to the Government’s 2012 Budget, “Economic Action Plan 2012 - A Plan for Jobs, Growth and Long-Term Prosperity” with its cost-cutting measures and commitment to reform of the federal public service. The Employer asserted that “…with future funding levels unpredictable, it is important for the Board to consider the impact of the economy on funding when awarding a provision that limits the Employer’s discretion in regard to expenses and/or increased benefits”. In so far as comparability is concerned, the Employer provided a list of 22 (out of 27) collective agreements in the Core Public Administration which provide for time and a half and double time as overtime rates. The Employer argued it was appropriate to bring this Bargaining unit in line with the other 22. No evidence was given by the Employer as to why five others are “exceptions to the rule”.

18       The Association argues that the Employer’s proposal on overtime rates would eliminate long-standing benefits enjoyed by members of the bargaining unit it represents. Triple time has existed since the first collective agreement with this unit signed by the parties in 1989-1991. The current article has been in its present form since the collective agreement of 1997. Citing the principles of replication and conservatism governing interest arbitration board proceedings, the Association urges this Board to reject the Employer’s proposal. However, if the Board were minded to accept the Employer’s proposal, the Association argued that this should only be done by compensating members of the bargaining unit for its real value in adjusted pay rates. The Association produced a table, which was not challenged by the Employer, and which estimated the Employer’s proposal would cost the bargaining unit members an average of $1,755 each, at an average of 1.99% of their annual earnings. This is the purported value of the Employer’s proposal to its members and the Association says they should be compensated accordingly.

Argument on the Self Directed Team Differential

19       The final live issue between the parties which lies to be determined by the Board is the matter of the so-called “Self-Directed Team Differential”. The Association, which makes this proposal, asserts that it should receive 11.4% as a premium above the normal rate of pay, to compensate its members for their efforts in coaching and facilitating the Self-Directed Teams which operate at FMF Cape Scott in Halifax. The Employer opposes this proposal root and branch. The parties debated at the hearing whether evidence needed to be presented on this issue. However, they each determined not to do so, and “agreed to disagree” in relation to the underlying factual nuances supporting their arguments. The arguments of the parties and the facts underlying their disparate positions on this issue need some background explanation.

20       There is no dispute over the fact that on October 23, 2003, the Management of the Halifax Dockyard signed a “Memorandum of Understanding: Self Directed Teams” with the Federal Government Dockyard Trades and Labour Council (East) (FGDTLC-E) and with the Bargaining Agent here, the Federal Government Dockyard Chargehands Association (among others, TSMs 1-5), and provided this document as a matter of information to the Professional Institute of the Public Service of Canada (PIPSC), the United National Defence Employees (UNDE) and the relevant local of the International Brotherhood of Electrical Workers (IBEW Local 2228). The Association and the Employer, though using slightly different language, are in agreement over the purpose of these Self Directed Teams (“SDT’s”). Says the Union: “The Self Directed Team initiative is a joint management labour strategy that aims to empower workers and gives employees more responsibility for the overall project with which they are involved” (Brief, para. 110). The Association continues: “The implementation of the SDT initiative represented a paradigm shift in the organization of work at FMF Cape Scott. The philosophy of work changed from a top-down approach to a team model”. The Employer’s Submission (at p. 49) states: “The intent of the differential when implemented was to compensate the trades level for taking ownership of (responsibility for) work to get it completed in a more efficient and effective manner, in a team construct”. At this point, Employer and Association perceptions diverge.

21       The Association asserts that the SDT initiative at FMF Cape Scott has been very successful and has become a model for other DND organizations. The Association claims the Halifax Dockyard has been recognized for the efforts made by its employees to meet the needs of its customers in a more timely manner. Moreover, the Association insists that the SDT initiative has been proven to be a cost effective and efficient model for the Employer. As to the impact on its members, the Association points to the Memorandum of Agreement which mandates a role as team “coaches” for the chargehands/supervisors and includes such duties as facilitating meetings, reporting to management, communicating with customers and other teams and dealing with staffing issues. Indeed, the coach role has been expanded beyond its original scope to include broader facilitation and mentoring for Teams, as evidenced by the Employer’s “Boundary Management” training document for the SDT’s. The Association pointed to two particularly complex examples of successful SDT operation in relation firstly, to submarine upgrades in the Halifax Dockyard, and, secondly, to team operations in foreign theatres of conflict, such as a generator replacement in a Canadian naval vessel in Toulon, France.

22       As to the justification for its proposal for an 11.4% salary premium for SDT work, the Association notes that the “differential” for SDT work was first included in the FGDTLC-E collective agreement which expired in December 2000, at which time it was set at 4%. However, the SDT premium rate for this trades bargaining unit “coached” or “supervised” by the Association’s members was raised to 11.4% effective January 1, 2007. The claim by the Association is that when it bargained with the Employer shortly thereafter in the shadow of the Expenditure Restraint Act, 2009, it gained a significant wage increase without reference to the SDT differential, although the increases were reduced by the effect of the legislation. In this context, the Association argues on the basis of internal comparability, and the role of their members training, skills and leadership in this specialized and effective context, its members are entitled to an 11.4% premium like that of the trades whom they supervise.

23       The Employer advanced a different view of the situation. It stated that it was anticipated, when the SDT’s were rolled out, that the differential would be paid only to those who were part of a formal team put together to do a specific job or designated group of jobs. The benefits envisioned included a reduction in the prioritization and coordination functions of the chargehands/supervisors who are members of the Association, and the idea was to create a “flattened” organizational form of management which would eliminate the Work Centre Manager/Foreman. This position was eliminated in 2000, but subsequently re-introduced when it was found that teams still needed co-ordination by chargehands in a more “hands-on” role. Thus the Employer argues that the SDT differential is paid to the members of the FGDTLC group for results never realized. The Employer proposes to eliminate the differential in the upcoming arbitration with the “SR-E group”.

The Board’s Decision on the Total Compensation Package

24       With the foregoing explanation of the issues, applicable principles and arguments from the parties, the Board is now in a position to present its determinations in relation to the integrated matters which make up the “total compensation package” that is really of concern here. Before launching into that analysis, however, it is important to state that the parties, at the hearing, confirmed that they are in agreement as to the term of the new Collective Agreement. In accordance with that agreement, the Board formally declares that the Collective Agreement shall run from April 1, 2011 to March 31, 2014.

25       On the inter-related matters of economic increase and severance pay, the Board determines that the Employer’s arguments on the economic and fiscal circumstances, as well as internal and external comparability matters in section 148 of the Act, as understood through the principles of replication and conservatism, militate in favour of the acceptance of the Employer’s position. That is, increases in rates of pay, consistent with the predominant pattern in other units of the federal public sector, shall be as follows:

The details of the pay severance arrangements are those set out in the Employer’s Brief at pp. 37-42, with the exception that the proposed effective date of September 15, 2011, shall be altered to October 15, 2012, the date of this Decision.

26       On the question of the Employer’s proposed reduction of overtime rates from triple time to double time and double time to time and a half, respectively, the Board has determined that the status quo of triple and double time must be maintained and the Employer’s proposal rejected. On this matter there are a number of inter-related reasons which lead to this determination. In terms of internal and/or external comparability under subsections 148 (b) and (c) of the Act, it is significant that the negotiated and now ratified agreement covering chargehands and supervisors at FMF Cape Breton in Victoria, B.C. (the Association’s counter-parts on the West Coast), maintains the triple and double time formula. Fairness requires the same on the East Coast. In addition, under subsection 148(d), the qualifications required for the work performed, the responsibility assumed and the nature of the services rendered by the chargehands and supervisors, like those on the West Coast, merits these exceptional over-time premiums. These people maintain Canada’s warships, both in Halifax and elsewhere in the world, doing work essential for the defence and security of the country and its allies. They clearly can be required to do so under emergency conditions or in situations, even at home in FMF Cape Scott, which may be very difficult. This factor militates against the adoption of the Employer’s proposal. Finally, in terms of the pattern bargaining which has emerged from current economic conditions and the Government’s fiscal circumstances, double and triple over-time rates for the 3rd smallest bargaining unit in the federal public service of some 70-80 people, is not going to break the bank or cause excessive taxpayer hardship. Nor under the particular circumstances of this bargaining unit should this determination create a precedent which will have an untoward impact on outstanding negotiations or arbitrations with other groups.

27       The final outstanding issue, the Self-Directed Team differential, requires a more nuanced solution. The Association asserts that the SDT’s have been a notable success in terms of time, cost and efficiency. The Employer claims that the SDT’s have not achieved their potential and should be bargained away with the FGDTLC-E which represents the trades in the SR-E group supervised by the Association’s members. If the Employer’s wishes in bargaining with the SR-E group win the day, the Association’s internal comparability arguments, at least for the future, will no longer be of relevance. The SDT’s will be gone, presumably on a go forward basis. In the event that the FGDTLC-E maintains this premium, the comparability and skills/ability/responsibility arguments of the Association will retain all their force and relevance. A fair solution is to grant a premium to the members of the Association which is contingent upon the continuance of the SDT concept, but spread over the three years of the agreement, and which will discontinue should management through the SDT system be abandoned. (In this regard, it is to be remembered that the Association is a signatory of the 2003 Memorandum of Understanding on SDT’s, and at the time of the hearing had apparently not been formally given notice, except through the Employer’s Brief, of the Employer’s intention to do away with SDT’s). However, if a contingent differential is to be awarded to the Association, it is clear to the Board that the proposed rate of 11.4%, even if spread over the three year term of the new Collective Agreement, is excessive given the current economic conditions and fiscal circumstances of the Government. The chargehands who coach or facilitate the SDT’s will therefore receive the following additional premium rates:

Effective April 1, 2011 - 1.75%
Effective April 1, 2012 - 1.75%
Effective April 1, 2013 - 1.75%

This arrangement, in the view of the Board, meets the requirements of the replication and conservatism principles as embodied and particularized in section 148 of the Act. However, given its contingent nature in relation to other bargaining activities, the Board hereby retains jurisdiction to deal with any problems which might arise in relation to the implementation of this SDT premium process which the parties cannot resolve.

Dated at Halifax, Nova Scotia, this 15^th day of October 2012.

Bruce P. Archibald, Q.C.
for the Arbitration Board