FPSLREB Decisions

[1]    The Professional Institute of the Public Service of Canada (PIPSC) has filed six references pursuant to section 99 of the Public Service Staff Relations Act (PSSRA) relating to the deduction of union dues by the employer. In particular, the bargaining agent alleges that the employer is in violation of the union dues check-off provisions in the six PIPSC collective agreements with the employer:

• Research Group
• Law Group
• Health Services Group
• Audit, Commerce and Purchasing Group
• Applied Science and Engineering Group
• Computer Systems Group

[2]    In its applications, the bargaining agent alleges the following:

There has been a failure to observe or carry out the said obligations, the particulars of which are as follows: The collective agreement requires that membership dues be deducted monthly from all employees in the bargaining unit. The collective agreement also requires that these dues be remitted to the Institute within a reasonable amount of time after deductions are made. Contrary to the collective agreement, the Employer has not deducted membership dues on a timely basis for new members of the bargaining unit, and has not remitted the dues for those new members to the Institute within a reasonable amount of time.

[3]    The bargaining agent requested that the Board issue the following order:

1. Declaring that the Employer has violated the check off provisions of the collective agreement;
2. Directing the Employer to cease and desist from such violations;
3. Directing the Employer to deduct membership dues on a monthly basis for all members of the bargaining unit, commencing within one month after a new member joins the bargaining unit.
4. Directing the Employer to remit membership dues to the Institute within one month after deducting such dues.
5. Directing payment by the Employer to the Bargaining Agent of an amount equal to the Bargaining Agent's losses arising out of the breaches of the collective agreement as set out above, with interest, retroactive to the commencement of the collective agreement;
6. An Order that the Employer, in collecting outstanding membership dues, not deduct more than the equivalent of two months of membership dues in any one month, consistent with the Employer's present policy; and
7. Such other relief as may be requested or necessary to make the Bargaining Agent whole.

[4]    Counsel for the employer, Jennifer Champagne, in a letter to the Board dated January 14, 2004, submitted that the bargaining agent was seeking "what appears to be exactly the same remedy" as in previous references involving the same parties decided by the Board in a decision issued on December 11, 2003 (Professional Institute of the Public Service of Canada v. Treasury Board, 2003 PSSRB 113). Ms. Champagne further submitted that it was the employer's belief that the December 11, 2003, decision provides "full and final remedy to all references scheduled to be heard". She requested that the hearing be conducted through written representations. In the alternative, she requested particulars from the bargaining agent "to specify what remains unanswered and how the remedy sought differs from what was already obtained" in the earlier decision.

[5]    Counsel for the bargaining agent, Dougald Brown, in a letter to the Board dated January 16, 2004, did not agree that the applications should be dealt with through written representations. He submitted that the applications were different from those references earlier decided by the Board. In a letter to Ms. Champagne, dated January 13, 2004 (copied to the Board), Mr. Brown stated that the hearing in this case deals with the failure of the employer to remit dues that are acknowledged by the employer to be owing to PIPSC in a timely fashion, whereas the earlier decision of the Board dealt with dues that the employer denied were owing.

[6]    The Board advised the parties, by letter dated January 16, 2004, that the applications would proceed to a hearing, as scheduled.

[7]    At the commencement of the hearing, Andrew Raven, counsel for the Public Service Alliance of Canada (PSAC), asked to make submissions with regard to the interests of his client. He noted that the PSAC was aware that the issues raised in this matter could relate to or have an impact on the way the issue of dues arrears is dealt with by the employer and PIPSC. He understood this to be a dispute between PIPSC and the employer, based on the provisions of the PIPSC collective agreements. He also indicated that he had discussed with counsel the arguments that were being relied on, and he had no concerns that the interests of the PSAC would be affected. He asked that notice be provided and the PSAC be allowed to make submissions if its rights or interests were to become an issue in the hearing. Mr. Brown, counsel for PIPSC, submitted that the bargaining agent was not challenging the arrangement between the PSAC and the employer. Ms. Champagne submitted that the PSAC internal policy on dues refunds was not at issue, as the earlier decision of this Board on the effective date for dues deductions disposed of the matter.

[8]    I ruled that the PSAC would be notified and allowed to make submissions if at any time during the proceeding it appeared that its interests would be affected. I have concluded that the rights of the PSAC were not affected by any matter that arose in the course of the hearing, or in the decision that follows.

[9]    Counsel for the bargaining agent and counsel for the employer both made opening statements. One witness testified on behalf of the bargaining agent and one witness testified on behalf of the employer.

[10]    In her opening statement, Ms. Champagne submitted that in this case the underlying issue is the PSAC internal policy on refunds of dues. However, with the new approach of using the effective date of the appointment, as required by the earlier Board decision, there should never be such delays in processing dues refunds again and the PSAC policy would no longer be an issue. She also submitted that should PIPSC wish to attack the PSAC internal policy, the proper forum for that discussion is the National Joint Council (NJC).

[11]    After the conclusion of the examination-in-chief of the witness for the bargaining agent, counsel for the employer requested an adjournment to a later date in order to obtain the proper documentation from each department. Counsel for the bargaining agent objected on the basis that an itemized dues and irregularities report had been sent to the employer in advance of the hearing and that the employer had sufficient particulars to know what the case was about. Ms. Champagne submitted that the applications were very terse in their language. She also submitted that the information provided by the bargaining agent was not necessarily reliable and the employer did not know if the individual cases cited by the bargaining agent had been resolved. She also submitted that it was not clear what the actual amount of money being claimed was, and she stated that the employer needed particulars as to the exact amount claimed.

[12]    I adjourned the hearing only until the next day. I noted at the hearing that the issue in this application is the employer policy and practice with respect to arrears of dues and pointed out that, in the event that the bargaining agent was successful in its application, I could retain jurisdiction to deal with any issues of quantum that might arise.

Evidence

[13]    The provision relating to union dues is the same in all six collective agreements between PIPSC and the Treasury Board (Exhibit A-1). For ease of reference, the clauses cited in this decision are from the Audit, Commerce and Purchasing group collective agreement:

26.01 The Employer will as a condition of employment deduct an amount equal to the amount of the membership dues from the monthly pay of all employees in the bargaining unit. Where an employee does not have sufficient earnings in respect of any month to permit deductions under this Article the Employer shall not be obligated to make such deductions for that month from subsequent salary.

26.02 The Institute shall inform the Employer in writing of the authorized monthly deduction to be checked off for each employee defined in clause 26.01.

...

26.05 No employee organization, as defined in Section 2 of the Public Service Staff Relations Act, other than the Institute, shall be permitted to have membership dues and/or other monies deducted by the Employer from the pay of employees in the bargaining unit.

26.06 The amounts deducted in accordance with clause 26.01 shall be remitted to the Institute by cheque within a reasonable period of time after deductions are made and shall be accompanied by particulars identifying each employee and the deductions made on the employee's behalf.

...

26.08 The Institute agrees to indemnify and save the Employer harmless against any claim or liability arising out of the application of this Article, except for any claim or liability arising out of an error committed by the Employer, in which case the liability shall be limited to the amount of the error.

26.09 When it is mutually acknowledged that an error has been committed, the Employer shall endeavour to correct such error within the two (2) pay periods following the acknowledgement of error.

[14]    The Treasury Board policy on "Check-off" (Exhibit A-2) contains the following provisions on the deduction and remittance of dues:

11. Arrears

Departments must collect dues owed but not paid by deducting an amount equivalent to the current monthly rate of dues until the full amount owing is collected.

Note:

For employees who are members of bargaining units represented by the PSAC, arrears subject to collection are limited to one year's dues.

12. Refund of dues

To correct deductions made in error, departments and agencies must submit pay input forms to the SSC pay office. However, when PSAC is involved, departments and agencies must submit a request for refund form (DSS-MAS 2595 (10.88): Appendix B) to the PSAC with a specific description of the transaction(s) creating the refund request.

If the PSAC agrees, the department and agencies submit pay input forms to SSC. If the PSAC disagrees, departments and agencies must consult Staff Relations Division, Treasury Board Secretariat.

[15]    The policy sets out the responsibilities of the Treasury Board Secretariat, departments, Supply and Services Canada (now known as Public Works and Government Services Canada (PWGSC)) and bargaining agents. According to the policy, the Treasury Board Secretariat is responsible for informing departments and PWGSC about general changes to dues and administering the policy and coordinating the activities "as the agent of the employer". Departments and agencies are responsible for starting and stopping dues deductions, changing dues deductions when there is a change in bargaining unit, completing and distributing required forms, and instituting the collection of arrears and overpayment refunds. PWGSC is responsible for implementing departmental deduction instructions, remitting deductions and lists of deductees to bargaining agents, implementing general increases in dues after notification from the Treasury Board Secretariat, and changing individual dues calculated by bargaining agents. The policy states that bargaining agents are responsible for informing the Treasury Board Secretariat about general changes in dues, calculating and informing PWGSC about individual dues to be deducted, and, in the case of the PSAC only, authorizing refunds.

[16]    Edward Gillis is the Executive Secretary of PIPSC and has overall responsibility for its dues administration. He testified that dues are deducted monthly from the pay of employees in the bargaining unit and remitted electronically by PWGSC to PIPSC's bank account. PIPSC receives a monthly list of bargaining unit members (the "BUD" list). Information on dues collected is provided separately, on a monthly basis, by PWGSC. This document is an itemized statement of dues collected for each employee. Dues for PIPSC bargaining unit members have been set at a flat rate of $47.00 per month since 2001 (Exhibit A-3).

[17]    Mr. Gillis testified that concerns about discrepancies between the numbers of bargaining unit members on the "BUD" list and the amount being received in dues by PIPSC first arose in 1999. A meeting with senior Treasury Board and PWGSC officials took place on May 11, 2001. The meeting included the Secretary of the Treasury Board, Frank Claydon, the President of PIPSC, Steven Hindle, and Michael Nurse, Associate Deputy Minister of PWGSC. In advance of that meeting, a letter was sent by Mr. Gillis to Mr. Claydon (Exhibit A-4) that contained a briefing note entitled: "PSAC Refund Policy - An Immediate Problem":

PSAC REFUND POLICY - AN IMMEDIATE PROBLEM

A particular irritant exists which the Professional Institute wishes to have addressed without delay.

In the summer of 1999, the Public Service Alliance of Canada adopted an internal policy whereby the PSAC refuses to refund more than twelve months of dues improperly deducted and remitted by the Employer to the PSAC.

Departments have, in turn, refused to remit to PIPSC more than twelve months of unpaid dues when these dues have been incorrectly paid to the PSAC, citing the PSAC's internal policy.

In effect, Departments are violating the terms of our collective agreements in order to adhere to an internal PSAC policy. The Professional Institute maintains that collective agreement obligations cannot be superceded by such a policy. Further, the Institute maintains that effective labour relations cannot be achieved in an environment where the Employer favours the interests of one bargaining agent over those of another.

The Professional Institute requests that Treasury Board advise all Departments to honour collective agreement obligations regardless of the PSAC policy on dues refunds.

[18]    On November 5, 2001, Mr. Gillis wrote to Mr. Smith indicating that progress had been made in some areas, but that he was less certain of the progress on policy issues, including the PSAC policy on refunds (Exhibit A-6). In his response dated December 17, 2001, Mr. Smith stated that, with regard to the PSAC internal refund policy, "we are currently working on a strategy to resolve this issue" (Exhibit A-7). Mr. Gillis testified that Treasury Board officials never advised him of the strategy being pursued.

[19]    Brian Jackson, a policy analyst with the Treasury Board Secretariat who is involved with dues administration issues, testified about the procedure used by departments in processing changes in union affiliation and dues administration. When an employee is appointed to a new position, the Department sends a copy of the letter of offer to the compensation advisor, who then initiates a pay transaction to start pay and union dues. When the advisor does the pay transaction electronically, he or she has to go to another "screen" to stop the dues deductions from one bargaining agent and start the dues deductions for the new bargaining agent. After making this change electronically, a "Change in Union Affiliation" form is prepared and sent to the bargaining agent.

[20]    Mr. Jackson testified that it is not always possible to commence the deduction of dues within two pay periods, as provided for in the collective agreement. This is because PWGSC prepares pay transactions two weeks in advance, and the ability to make a change within two pay periods depends on the timing of the notice. In some cases, it might not be possible to make the required change until the third pay period.

[21]    Mr. Jackson testified that there are three bargaining agents that require authorization before the employer refunds dues paid in error: the PSAC, the Professional Association of Foreign Service Officers (PAFSO), and the Association of Public Service Financial Administrators (APSFA). In all other cases, the Department simply adjusts the monthly remittances of the bargaining agent and directs money paid in error to the employee as a lump sum. A revised income tax statement (a "T-4A") is issued to the employee, if necessary, to reflect the refund in union dues. In most cases, arrears owing to the appropriate union are then deducted by way of monthly deductions. In other words, the employee is paying "double dues" to cover current dues owing, as well as the arrears. In some cases, departments offer employees an option of paying the arrears in a lump sum and a personal cheque from the employee is forwarded directly to PIPSC.

[22]    In cross-examination, Mr. Jackson stated that it was not possible to pay the full arrears directly to the bargaining agent and then recover the amount owing from the previous bargaining agent because of income tax concerns. He testified that if the arrears were dealt with in this way, a T-4A could not be issued and the employee would be disadvantaged from a tax perspective.

[23]    Mr. Gillis gave a number of examples of the correspondence between PIPSC and departments on the collection of arrears (Exhibit A-8). Included in the correspondence from each department is a form used by the Department to request a reimbursement of dues from the PSAC. The form requires the authorization of the PSAC for a reimbursement. In each case, the PSAC has included the following statement on the form: "PSAC policy to reimburse dues equivalent to one year of deductions." The PSAC then calculates the amount of dues owing for a 12-month period.

[24]    The departments do not deduct dues in arrears from employees formerly in a PSAC bargaining unit for more than 12 months. In a letter from Transport Canada dated April 4, 2001(Exhibit A-8, tab 1), the rationale is set out as follows:

I have not activated your request for the dues in arrears as we feel it is unfair to the employee, who was paying PSAC dues for the entire period of time, and was only reimbursed for 12 months of dues.

[25]    It is the practice of departments to not commence the collection of dues in arrears from an employee until a refund of dues from the other bargaining agent has been authorized. Mr. Jackson testified that the Treasury Board policy (Exhibit A-2) does not require that the department wait for a refund before commencing double deductions, and the Treasury Board Secretariat had never provided such direction to departments. PIPSC, in its letters to departments, specified that this should be the normal procedure (Exhibit A-8):

If dues were deducted in error from some other union, please have this money recovered and refunded to the employee before picking up the arrears owed to the Professional Institute.

[26]    In a letter sent to PWGSC on November 6, 2001, with regard to dues in arrears for a PIPSC bargaining unit member employed at PWGSC, Paula Shaver, who was the responsible section head at PIPSC, stated:

As the PSAC will only agree to refund 12 months, please proceed to have 12 months arrears picked up for the Professional Institute.

The employee should not be charged twice for the same period of time. However, we still consider the balance of the amount owed . to be outstanding.

[27]    In a letter sent to Indian and Northern Affairs Canada on January 10, 2003, Ms. Shaver pointed out that a bargaining unit member should not be paying twice for the same period, and further noted:

The Department should be responsible for the remainder of the balance owed to the Professional Institute ($833.21) not the employee as the dues were directed in error for the PSAC due to an administrative error and the Department is not able to obtain a refund for the employee.

[28]    In a letter sent to PIPSC from Human Resources Development Canada, Ontario region, dated January 16, 2004 (Exhibit A-9), PIPSC was advised of a bargaining unit member who was mistakenly paying union dues for over 10 years to the PSAC. The Department noted that it had applied to have him reimbursed for the "maximum" 12 months that he paid to the PSAC and calculated that the total amount of dues in arrears was $4,531.04. The Department asked if there was a provision "to ameliorate the arrears owing to PIPS".

[29]    Mr. Jackson testified that in September 2001, the Treasury Board Secretariat started a process to acquire an automated system so that whenever a compensation advisor commences a change in pay as a result of an appointment, a screen is displayed that requires the advisor to make the change to the dues deductions. In August 2003, estimates of the cost of such an automated system were provided, and Mr. Jackson testified that the employer has opted for the "Cadillac version".

[30]    Mr. Jackson testified that there were two feasible options to ensure that arrears do not accumulate in the future. The first is to work with PIPSC and PWGSC to create an automated system that would allow PIPSC to bypass departments and deal directly with PWGSC. This is the process used by the PSAC. The second option is for PIPSC to implement percentage dues (dues calculated as a percentage of salary) so that as soon as an employee appears on the "BUD" list, the computer automatically starts the deductions. This would eliminate most of the input from the compensation advisors. In examination-in-chief, Mr. Jackson testified that these options had not been discussed with PIPSC.

[31]    Mr. Gillis estimated that the amount of arrears attributable to the dues paid in error to the PSAC at approximately $400,000. This estimate includes arrears for the 12-month period that the PSAC routinely authorizes for repayment, as well as arrears for periods greater than 12 months. The estimate is based on dues owing from the date of the letter of offer and does not take into account the decision of the Board issued on December 11, 2003 (Professional Institute of the Public Service of Canada v. Treasury Board (supra)), on the effective date for dues deductions. Mr. Gillis also testified that the PSAC is taking approximately 12 months to reply to requests for authorization for refund of dues.

Arguments

For the Bargaining Agent

[32]    Mr. Brown stated that after Mr. Gillis started his position as Executive Secretary, PIPSC became aware that it was owed a large amount of dues. It identified the practices that were the chief systemic causes of the problem and brought these to the attention of senior Treasury Board officials in May 2001 (Exhibit A-4). When sufficient progress was not made as a result of consultations with the employer, two applications under section 99 of the PSSRA were made. The Board rendered a decision on the first application on December 11, 2003 (supra).

[33]    Mr. Brown submitted that this second application concerns the practice of dues owing to PIPSC when those dues had been paid to the PSAC in error. This is not an isolated or unique problem, but a systemic problem. The problems are illustrated by the correspondence and documents in Exhibit A-8, and no issue has been taken with that evidence. There is no real dispute that significant liability for arrears is owing to PIPSC.

[34]    Mr. Brown noted that the problem starts when an employee moves to a PIPSC bargaining unit from another union. The compensation advisor in the Department fails to take the appropriate action to change the dues deductions. Because of that failure, union dues continue to be remitted to the former bargaining agent. Typically, it is not until PIPSC notices the name on a "BUD" list that the error is brought to the attention of the employer. Once the employer is notified of the error, the change in dues deductions going forward is made and there is no issue. There is no dispute that the arrears of dues going back to the effective date are properly payable and owing to PIPSC.

[35]    Mr. Brown submitted that the entitlement to the arrears of dues flows from the provisions of the collective agreement: clauses 26.01 and 26.06. The collective agreement makes it clear that the parties have agreed that errors are to be corrected promptly (clauses 26.08 and 26.09). The obligation is to correct the error within two pay periods, not to simply initiate a process, which may or may not result in payment of arrears owing to PIPSC. The words of the collective agreement and the practice of the parties are that dues are to be remitted in the normal course, on a monthly basis, and that errors are to be corrected promptly. In the case of bargaining agents other than the PSAC, the errors are corrected by way of a debit lump sum adjustment to the monthly remittance of dues. The practice of the employer with regard to arrears from the PSAC is contrary to its obligation under the collective agreement. The evidence was that it is a consistent practice not to pay any arrears owing to PIPSC until the PSAC has responded to the request for a refund. If more than 12 months of arrears are owed, PIPSC is not getting all of the dues, which the employer admits it owes. Mr. Brown submitted that it was clear that an obligation in a collective agreement prevails over a Treasury Board policy.

[36]    Mr. Brown stated that the collective agreement requires that when arrears of dues are acknowledged to be owing, those arrears are payable to PIPSC within two pay periods (clause 26.09). The employer can then recover the dues remitted in error to the other bargaining agent. The employee can then be compensated for any overpayment of dues as a result of the employer error and any underpayment can be recovered by way of continuing deductions from the employee's pay. Mr. Brown submitted that there was no plausible reason for why the employer could not adopt such a system.

[37]    Mr. Brown submitted that the employer practice and policy with regard to dues arrears was manifestly inconsistent with the clear provisions of the collective agreement. The failure of the employer to remedy the error in dues until the PSAC responds to the request for refund, typically many months from when the error is discovered, is clearly contrary to clause 26.09 of the collective agreement. The employer practice of returning the amount of the refunded dues directly to the employee is also contrary to the collective agreement. Those dues are properly payable to PIPSC. The employee was represented by PIPSC and received the benefit of the collective agreement. The dues that were incorrectly paid to another bargaining agent should be paid directly to PIPSC and not issued as a refund to the employee.

[38]    The employer practice of limiting the collection of dues arrears to 12 months is also contrary to the collective agreement, Mr. Brown argued. Clause 26.08 provides that the liability of the employer is limited to the amount of the error and not to just a part of it. The refusal of the employer to pay more than 12 months means that if PIPSC is to insist on the full payment of arrears, the employee will be forced into a situation where he or she has paid union dues to two unions for the same period of time. This is inconsistent with the provisions of clause 26.05. The practice of paying arrears by way of double deductions is contrary to clause 26.09, which requires that errors be corrected within two pay periods. In some cases, PIPSC is receiving dues years after they were properly payable. This is a situation that is not reasonable and does not or could not accord with the reasonable expectations of either party under the collective agreement.

[39]    Mr. Brown submitted that the suggestion by the employer that the agreement of three parties is required to fix the situation is not tenable. The collective agreement is between PIPSC and the employer. It is up to the employer to take whatever steps it sees fit to recover the dues that the employer paid in error to the PSAC. If the employer wants to limit the obligation of the PSAC, it is in its power to do so; however, that agreement cannot be used as a means of undermining or limiting the employer obligation to PIPSC under the collective agreement.

[40]    Mr. Brown submitted that in Professional Institute of the Public Service of Canada v. Treasury Board (PSSRB File No. 125-2-63 (1995) (QL)), the Board held that the employer was obligated to pay union dues not collected when it was no longer possible to deduct those union dues from an employee's salary. In the decision, the Board ordered payment by the employer within 60 days and not on "an instalment plan". Mr. Brown also referred me to Canadian Air Traffic Control Association v. Treasury Board (Transport Canada) (PSSRB File No. 169-2-588 (1997) (QL)), and Re Canada Post Corp. v. Canadian Union of Postal Workers (1992), 29 L.A.C. (4th) 289.

[41]    Mr. Brown submitted that when none of the error in dues collection is attributable to the bargaining agent, the bargaining agent should be made whole immediately. The party who is at fault should bear the burden of any prejudice or loss. Interest is not payable on the amounts owing, and if anyone has to wait for a refund of arrears, it should not be the innocent party.

[42]    Mr. Brown said that the bargaining agent was seeking declaratory relief on the systemic practices of the employer, in three parts:

• that the employer practice of withholding payment of arrears owing to PIPSC until the PSAC responds to the request for refund is contrary to the collective agreement;
• that the employer practice of limiting arrears paid to PIPSC to 12 months is contrary to the collective agreement, and
• that the employer practice of refunding dues erroneously paid to the PSAC by way of lump sum directly to the employee, instead of by way of lump sum payment to PIPSC, is also contrary to the collective agreement.

[43]    Mr. Brown submitted that in order to make PIPSC whole and to be consistent with the previous decision of the Board, I should issue an order directing the employer to pay the arrears owing to PIPSC on the basis of the principles set out in that decision. Mr. Brown submitted that the order for compensation should not be time-limited and that the liability of the employer should be for the full amount of dues remitted erroneously to another bargaining agent.

[44]    Mr. Brown requested that the Board direct the parties to meet to determine the quantum owed by the employer and that I remain seized for a period of 90 days. Mr. Brown suggested that it would then be open to the bargaining agent to come back to the Board with a view to having the Board put in place a process using its officers to determine the exact quantum owed.

For the Employer

[45]    Ms. Champagne began by noting that the employer had not had sufficient time to validate the evidence contained in Exhibit A-8 (the binder of correspondence) and the employer did not admit the evidence contained in the binder. She stated that we do not know if the situations set out in the binder were resolved or if there is other information available that could complete the picture.

[46]    Ms. Champagne submitted that the issue before me was the impact of the earlier decision on dues, issued by the Board on December 11, 2003. It was her submission that the December 11, 2003, decision was a full and final solution of this section 99 application. In that decision, the Board ruled that dues should be collected and remitted in a timely manner, and that the dues should be picked up and remitted from the effective date of the appointment. In the cases set out in Exhibit A-8, the dues were not collected and remitted as of the effective date. This is probably the explanation for most of the delays in collection and remittances, in most cases. The December 11, 2003, order of the Board will address this. She argued that I should let the implementation of the December 11, 2003, decision unfold, and should anything remain unresolved, it will be brought back to me as I remain seized of that decision.

[47]    In the alternative, Ms. Champagne submitted that PIPSC's contention that the employer is refusing to pay dues to them until the refund is received from the PSAC was false. Mr. Jackson testified that it was in no way part of the terms of the employer policy or its intent. It was also not in accordance with the directions given by the Treasury Board to departments. The policy does require that recovery of arrears be commenced immediately (sections 4.1 and 11). The policy may not have been applied that way, at the request of PIPSC. In Exhibit A-8, in correspondence from PIPSC, it asks that the refund be obtained before giving the arrears to PIPSC. The employer cannot be blamed for acting upon the direction of PIPSC.

[48]    Ms. Champagne also submitted that there is nothing in the collective agreement or the Treasury Board policy that would in any way oblige the employer to remit the arrears directly to PIPSC. It is the employee's money that is at issue here. The amounts given to one bargaining agent are based on a different dues structure and are different amounts. The money is therefore refunded to the employee and then the arrears are picked up by way of employee deductions.

[49]    Ms. Champagne noted that the collective agreement provision in clause 26.09 states that the employer shall endeavour to correct the error within two pay periods. Mr. Jackson testified that this could not automatically be done, and is often a question of timing. The employer cannot guarantee that this will be done within two pay periods, and it could be within three pay periods. The clause states that the employer will "endeavour" to correct the error and does not state, "shall correct" the error. It means that the employer shall undertake to correct within two pay periods. Had it been the intent of the parties to correct the error within two pay periods, the collective agreement would have said so.

[50]    Ms. Champagne submitted that the jurisprudence cited by the bargaining agent (Professional Institute of the Public Service of Canada v. Treasury Board (supra); Canadian Air Traffic Control Association v. Treasury Board (Transport Canada) (supra); and Re Canada Post Corp. v. Canadian Union of Postal Workers (supra)) states that when dues can be recovered, they should be. The Treasury Board is not a bank and should not be obliged to pay a lump sum to PIPSC. The role of the Treasury Board is to be a facilitator or intermediary to collect the dues and remit them to bargaining agents. There is no obligation to go into its own pockets to pay union dues. The arbitrator in Re Canada Post Corp. stated that any sums that are recoverable should be recovered. The Treasury Board has no financial authority to go into its own pockets to pay dues when those dues are recoverable. The money that can be recovered through deductions from employees should then be remitted to PIPSC. Three bargaining agents (PAFSO, APSFA and PSAC) have an approval process in place for refunds. The PSAC is not the only bargaining agent with this policy. For these bargaining agents, approval is needed before a refund is issued. This is the employee's money and at no time does the Treasury Board or anyone representing the employer hold the money.

[51]    Ms. Champagne referred me to the testimony of Mr. Jackson, who said that there were options to facilitate the collection of dues, such as the automated system used by the PSAC. Mr. Jackson also testified as to the willingness of the employer to implement an automated system for its compensation clerks. Since 2001, there has been significant progress in addressing issues identified by PIPSC. PIPSC did not look at any other options or tools it could use to address the problems. The bargaining agent also has obligations to do what it can to facilitate the collection and remittance of dues. The bargaining agent could have more control over the process of dues deductions.

[52]    Ms. Champagne submitted that there is no evidence before the Board that could justify PIPSC's claims that arrears of dues in the range of $400,000 are owed.

[53]    Ms. Champagne stated that with regard to the PSAC policy of not refunding arrears of more than 12 months, PIPSC was asking me to declare the employer liable directly to PIPSC, as opposed to having the employee be liable. There is no obligation for the employer to remit arrears directly to PIPSC under the collective agreement. Mr. Jackson also testified as to the impact of this on an employee's income tax deductions.

[54]    Ms. Champagne submitted that the practical reality faced by the employer was that three bargaining agents have an internal policy that requires approval of refunds. If all bargaining agents had the same procedures, it certainly would facilitate the collection and remittance of dues. She asked me to be cognizant of this reality. The employer is in no position to ask any bargaining agent to modify its internal policies.

[55]    Ms. Champagne noted that once dues are picked up from the effective date of the appointment to a PIPSC bargaining unit, the PSAC policy in itself should not be a problem. If dues are remitted in a timely manner, the situation where more than 12 months of arrears is sought should not arise. The order set out in the Board's December 11, 2003, decision provided a solution to this problem.

[56]    Ms. Champagne submitted that if I should order that an amount of money is owed, I should allow for a period of time - 30 days - for PIPSC to provide the employer with details on exactly what is being sought. After those 30 days, I should then apply a 90-day period to allow the parties to implement the decision.

[57]    Ms. Champagne observed that the door remains open to discuss other options for dues deductions with PIPSC. Both parties have an obligation to look at what can be done to make the dues deduction and remittance process more efficient and less cumbersome.

Reply

[58]    The employer did not bring forward any other options to PIPSC; therefore, the employer cannot criticize PIPSC for not considering other options. Mr. Jackson suggested a different dues structure as one option. It is not the employer's role to suggest changes to a bargaining agent's dues structure.

[59]    Mr. Brown argued that it is important to look at the employer's reference to PIPSC's request to refrain from dues deductions until the refund was received from the bargaining agent's perspective. If "double dues" deductions from the employee commence right away, the employee is being required to pay dues twice. The employee has already had dues deducted and is now faced with "double deductions". The approach suggested to departments by PIPSC is really a way to ameliorate the impact of the employer's practice. The employer can hardly rely on that statement to justify its practices that contravene the collective agreement. There was no evidence that compensation advisors relied on this statement in the letters. Even if there were, PIPSC clearly told the Secretary of the Treasury Board, in May 2001, that what was being done was contrary to the collective agreement.

[60]    Mr. Brown submitted that the phrase "endeavour" in clause 26.09 of the collective agreement was meant to deal with the situation where, because of timing, the error could only be corrected within three pay periods rather than two. No one would suggest that there was a breach if the error was corrected within three pay periods.

[61]    Mr. Brown argued that the suggestion that the Treasury Board has no authority to pay dues where those dues have been paid to another bargaining agent is not supported by a plain reading of the collective agreement (clause 26.08) that provides for liability for the amount of the error. If the employer's only obligation were to act as an intermediary, different language would have been used.

[62]    Mr. Brown agreed with the suggestion of the employer's counsel that time be provided for PIPSC to provide particulars of the amount owed. He suggested that from the date that PIPSC provides the particulars, the parties be given 60 days to attempt to resolve the amounts owing.

[63]    Mr. Brown stated that the offer of the employer to work toward solutions for dues arrears would certainly be taken up by the bargaining agent. PIPSC has attempted to do this since 2001, but has not made sufficient progress.

Reasons for Decision

[64]    In an earlier decision (Professional Institute of the Public Service of Canada v. Treasury Board (supra)), I decided that the employer was in breach of the collective agreement with regard to its determination of the effective date for the deduction of dues. This application relates to the employer's policy and practices in the remittance of dues in arrears. Although the earlier decision on the effective date for dues deductions will have an impact on the extent of arrears in some cases, the issues raised in the two applications are quite distinct. The earlier decision deals with the commencement of the employee's obligation to pay union dues, while this case deals with the obligations of the employer once the employee's obligation commences. The suggestion of counsel for the employer that my earlier decision will resolve the situation is speculative. Even if the decision does resolve the underlying issue of the remittance of arrears, it will do so only for the future and does not address the current situation.

[65]    The payment of dues is an obligation owed by all employees in a bargaining unit to their accredited bargaining agent, and counsel for the employer is correct when she states that the money deducted from employees' pay cheques is not the employer's money. The role of the employer in collecting union dues has been characterized as that of an "agent" of the union and a "trustee" for the deducted dues (MacNeil, Lynk and Engelmann, Trade Union Law in Canada). In Re Sun Haulage Inc. v. Teamsters' Union, Local 230 (1981), 29 L.A.C. (2d) 396, the arbitrator stated:

The payment of dues to the union is an obligation of the employees and not of the company. Under the terms of the collective agreement the company is in the position of agent or trustee on behalf of the union to collect the dues of the employees and remit them to it.

[66]    In International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (U.A.W.) Local 636 v. Truck Engineering Ltd., [1978] 1 C.L.R.B.R. 293, the Ontario Labour Relations Board concluded:

Where a dues check-off system is employed, the employer acts essentially as a collector of moneys due and owing from the employees to the union. The employees have earned the full amount of the wages from which the dues are deducted, but on the basis of the terms of a collective agreement . the employer deducts from the wages owing amounts equivalent to the sums owed by the employees to the union. In so doing the employer does not personally become entitled to the money in that he is acting merely as an agent for the collection and transmission of the dues to the union. The employer possesses no authority to do anything with the money so obtained other than to forward it to the union.

[67]    Although the obligation to pay dues is an obligation between the employees and the union, it is clear that the collective agreement creates contractual obligations on the part of the employer to both deduct and remit those dues. In Caressant Care Nursing Home of Canada Ltd. v. Christian Labour Association of Canada, [1999] O.L.A.A. No. 307 (Q.L.), the arbitrator noted:

The employer has entered into a contract with the union to perform certain tasks on its behalf, i.e. to deduct and remit dues from employees. The employer has violated that contract and as a result the union has suffered monetary losses. The consequence of a breach of contract is that the employer becomes liable for the amount of loss it caused by its breach. The employer's liability is not to pay union dues on behalf of its employees, but to compensate the union for the losses it caused by a breach of contract. That is a fundamental and basic principle of the law of contract, which is equally applicable in the case of a breach of a collective agreement.

[68]    The Board has held (in Canadian Air Traffic Control Association v. Treasury Board (Transport Canada) (supra) and Professional Institute of the Public Service of Canada v. Treasury Board (supra)) that the employer is liable for the amount of union dues not collected where the employee has left the bargaining unit. The situation here is different, in that money has already been collected from employees (although not the correct amount) and remitted to the wrong bargaining agent. The principle of employer liability for dues not remitted to the bargaining agent is, however, applicable in this case. In the situation where an employee has left a bargaining unit owing dues (as was the case in Canadian Air Traffic Control Association v. Treasury Board (Transport Canada) (supra) and Professional Institute of the Public Service of Canada v. Treasury Board) (supra), the employer may well have recourse against its former employee for these unpaid dues. In the case of dues remitted to the wrong bargaining agent, the employer may well have recourse against those bargaining agents that have received money in error. However, that is not an issue before me. The dispute before me relates only to the rights and obligations that arise from the contractual relationship between the employer and PIPSC.

[69]    The employees' obligation to have dues deducted has been fulfilled. Although the dues were not deducted at the appropriate rate, it remains the fact that employees have had amounts deducted for union representation from their pay and through the employer's inaction, those amounts were sent to the wrong bargaining agent. As the agent of PIPSC, the employer has failed in its obligation to remit dues that it collected and that are owing. The employer practice of limiting the payment of arrears to 12 months is therefore a violation of the collective agreement. The employer is consequently liable for the losses caused by its breach of the collective agreement. The fact that those amounts remitted in error may be recoverable is a matter between the employer and the third-party bargaining agent and is not a matter that is before me in these applications.

[70]    In its applications, the bargaining agent sought payment of an amount equal to the losses arising out of the breaches of the collective agreement retroactive to the commencement of the collective agreement. In argument, Mr. Brown submitted that the order for compensation should not be time-limited. The bargaining agent put the employer on notice that there was a problem with arrears of dues in May 2001. Prior to that time, it appears from the evidence provided that PIPSC acquiesced to the employer's practice of not remitting more than 12 months of arrears. Accordingly, the order for compensation of PIPSC's losses is retroactive to May 1, 2001, when the employer was put on notice of the bargaining agent's position. The applications also requested interest on the amounts owing. At the hearing, Mr. Brown acknowledged that the Board is without jurisdiction to award interest.

[71]    The issue of the obligation of the employer in future cases of arrears was also raised at the hearing. The bargaining agent's position was that the obligation of the employer was to pay the arrears owing within two pay periods, as required by the collective agreement (clause 26.09). The employer's position was that the arrears were only due after a refund from the other bargaining agent had been received. In previous Board decisions (Canadian Air Traffic Control Association v. Treasury Board (Transport Canada) (supra) and Professional Institute of the Public Service of Canada v. Treasury Board (supra)), the employees had never had amounts deducted from their pay and the employer was entitled to some time to obtain those deductions from employees. The practice for arrears owed by employees still employed in the public service is to collect those arrears by way of "double deductions". This results in the least hardship to individuals, while still recognizing their obligation to pay union dues. In the case before me, the employees have already met their obligation to have dues deducted and it is only through the error of the employer that those dues were directed to the wrong bargaining agent.

[72]    The collective agreement states that the employer "shall endeavour to correct such error within the two pay periods following the acknowledgement of error." "Endeavour" means to try one's hardest or to make "best efforts" to resolve a matter. In the context of this collective agreement provision, this means that there is no absolute requirement that the error be corrected within two pay periods. However, in light of the fact that the obligation of the employer to compensate the bargaining agent for any losses suffered as a result of a breach of the collective agreement crystallizes at the time that the error is mutually acknowledged, it is not reasonable for the employer to delay remitting amounts owed pending a refund of dues that were paid to another bargaining agent as a result of the employer's error. The employer must make its best efforts to determine the amount of dues owed and make the necessary adjustments to the monthly electronic transfer of funds to PIPSC, whether or not it has obtained a refund of dues remitted to the wrong bargaining agent. Any underpayment of dues by an employee for the period in arrears can be addressed by way of "double dues" deductions. Similarly, any overpayment of dues by an employee can be addressed by providing a lump sum payment directly to the employee.

[73]    Counsel for the employer referred to the income tax implications of paying the arrears to PIPSC rather than directly to the employee. The income tax implication of not providing a full refund to an employee is a matter for the Canada Revenue Agency (CRA) to determine; it is not a matter within the Board's jurisdiction.

[74]    It was clear at the hearing that the current amount of arrears of dues was not yet accurately determined. The parties will require time to exchange information and ascertain the quantum of arrears. The parties will have 120 days from the date of this decision to agree on the quantum, and for the employer to pay that amount to the bargaining agent.

[75]    In conclusion, I find that the employer has breached its obligation under the collective agreement to remit dues to PIPSC and is liable for the losses suffered by PIPSC as a result of that breach, retroactive to May 1, 2001. I will remain seized of this matter for a period of 130 days from the date of this decision in the event that the parties encounter any difficulties in its implementation.

Ian R. Mackenzie,
Board Member

OTTAWA, April 26, 2004.