Date: 20250214

File: 566-34-41678

 

Citation: 2025 FPSLREB 17

Federal Public Sector Labour Relations and Employment Board Act and Federal Public Sector Labour Relations Act

Before a panel of the Federal Public Sector Labour Relations and Employment Board

Between

 

QI (ANN) XU

Grievor

 

and

 

CANADA REVENUE AGENCY

 

Employer

Indexed as

Xu v. Canada Revenue Agency

In the matter of an individual grievance referred to adjudication

Before: David Orfald, a panel of the Federal Public Sector Labour Relations and Employment Board

For the Grievor: Chris Finding, Professional Institute of the Public Service of Canada

For the Employer: Christine Côté, counsel

Decided on the basis of written submissions,
filed May 15, June 15, July 7 and 24, and August 11 and 29, 2023.

REASONS FOR DECISION

I. Overview

[1] This is a grievance about the appropriate rate of pay for an employee who moved from one bargaining unit to another following the implementation of a retroactive adjustment made to the rates of pay that applied to her former position.

[2] Qi (Ann) Xu (“the grievor”) is an employee of the Canada Revenue Agency (“CRA” or “the employer”). She began her employment with the CRA in January 2008 in a tax auditor position in the Service and Programs (SP) bargaining unit represented by the Public Service Alliance of Canada (PSAC), classified at the SP-05 group and level.

[3] On October 6, 2014, she was promoted to a tax auditor position in the Audit, Financial and Scientific (AFS) bargaining unit represented by the Professional Institute of the Public Service of Canada (PIPSC), classified at the AU-1 group and level.

[4] At the time of her promotional appointment, the rates of pay set out in the applicable collective agreement between the PSAC and CRA had expired.

[5] In the fall of 2016, a new collective agreement between the PSAC and CRA was signed. It included pay increases retroactive to November 1, 2012, prior to her promotion. The employer reviewed the grievor’s pay and determined that the retroactive increases in pay for her former position would not result in a change to her AU-1 rate of pay.

[6] The grievance challenges that decision. The grievor believes that she should have been moved up one step in the AU-1 pay grid, retroactive to the date of her promotion. She argues that flowing from the employer’s alleged error, she was underpaid through three subsequent promotions over the course of eight years.

[7] The grievance is denied on its merits. I have concluded that the CRA correctly calculated the grievor’s pay and correctly applied the rules in its Directive on Terms and Conditions of Employment (“the Directive”).

[8] In the process of getting to the merits, my decision must address jurisdictional objections made by the employer to the grievance. It argued that the grievance does not properly engage the grievor’s collective agreement and that the Federal Public Sector Labour Relations and Employment Board (“the Board”) does not have jurisdiction to interpret and apply the employer’s Directive. Alternatively, it argued that if the grievance does engage a collective agreement, then it was the one between it and the PSAC. As such, the grievor would have to be represented at adjudication by the PSAC, not by PIPSC. In my reasons, I address those issues first. The jurisdictional objections are dismissed.

II. Summary of the facts

[9] The parties provided an agreed statement of facts, supplemented by a joint book of documents of 15 tabs. I will briefly summarize the salient facts.

[10] The grievor began her employment with the CRA on January 2, 2008. As noted, she was appointed to an SP-05 position represented by the PSAC.

[11] On July 3, 2012, she began acting in an SP-06 position. On January 13, 2014, while still acting in the SP-06 position, she began acting in an SP-07 position. Both of these levels are included in the SP bargaining unit represented by the PSAC.

[12] Effective October 6, 2014, the grievor was promoted permanently to a position at the AU-1 group and level, in PIPSC’s AFS bargaining unit.

[13] Before her promotional appointment, the grievor had been subjected to the SP collective agreement between the PSAC and CRA with an expiry date of October 31, 2012.

[14] After her promotional appointment, the grievor was subjected to the AFS collective agreement between PIPSC and the CRA with an expiry date of December 21, 2014 (“the 2014 PIPSC collective agreement”).

[15] On October 25, 2016, the PSAC and CRA signed a new collective agreement, with an expiry date of October 31, 2016 (“the 2016 PSAC collective agreement”). That agreement set out pay increases for the SP group retroactive to November 1 of 2012, 2013, 2014, and 2015.

[16] The grievor’s rates of pay in her substantive SP-05 position can be found in Appendix “A” to the 2016 PSAC collective agreement, which I have excerpted as follows:

SP-05
		1	2	3	4	5
November 1, 2011	From:	53053	54645	56284	57973	59713
November 1, 2012	A	53982	55602	57269	58988	60758
November 1, 2013	B	55062	56715	58415	60168	61974

 

[17] At the time the grievor was promoted, her substantive SP-05 rate of pay was the one found at step 5 of the “From” line: $59 713. As a result of the 2016 PSAC collective agreement being signed, the retroactive rate of pay in effect at the time of the promotion became the amount found at line B, step 5: $61 974.

[18] The SP-07 acting rate of pay applicable to the grievor can also be found in Appendix “A” to the 2016 PSAC collective agreement, which I have excerpted as follows:

SP-07
		1	2	3	4	5
November 1, 2011	From:	62111	63975	65893	67871	69907
November 1, 2012	A	63198	65095	67047	69059	71131
November 1, 2013	B	64462	66397	68388	70441	72554

 

[19] When the grievor was promoted to the AU-1 position, her SP-07 acting rate of pay was the one found at step 3 of the “From” line: $65 893. As a result of the 2016 PSAC collective agreement being signed, the retroactive rate of SP-07 acting pay in effect at the time the promotional appointment was made became the amount found at line B, step 3: $68 388.

[20] At the time of the grievor’s appointment to the AU-1 position, the employer applied the rules in its Directive, specifically what the parties referred to as the “promotion/transfer rule” and the “subsequent acting rule”. It determined that the grievor’s rate of pay was $66 859 per annum (step 6) and that her next pay increment date (to step 7, or $69 158) would be October 5, 2015.

[21] These rates can be found in the “From” line in the AU-1 rates of pay under the collective agreement signed by PIPSC and the CRA on March 29, 2018, with an expiry date of December 21, 2018 (“the 2018 PIPSC collective agreement”), at steps 6 and 7.

		1	2	3	4	5	6
December 22, 2013	From:	55394	57675	59971	62265	64563	66859
December 22, 2014	A	56087	58396	60721	63044	65371	67695
		7	8
December 22, 2013	From:	69158	72532
December 22, 2014	A	70023	73439

 

[22] I note that the grievor’s revised retroactive acting rate of pay at step 3 of the SP-07 rates of pay ($68 388) was thus higher than her rate of pay at step 6 of the AU-1 rates of pay ($66 859) by just over $1500 per year.

[23] In early December 2017 (after the implementation of the 2016 PSAC collective agreement), the grievor lodged an inquiry about her pay with the CRA compensation office in Winnipeg, Manitoba. On December 4, 2017, someone from that office responded to her inquiry. They explained that they had reviewed her pay and had applied the promotion/transfer rule from the Directive, followed by the subsequent acting rule. They explained that the promotion/transfer rule was applied in relation to the grievor’s promotion from her substantive SP-05 position to the AU-1 group and level. The subsequent acting rule was applied considering her time in the SP-07 position.

[24] The compensation office noted that the revised maximum rate of pay at the SP-07 group and level was, as of then, higher than the maximum rate of pay at the AU-1 group and level, engaging section 7.6.1(c) of the Directive. It said that the application of that rule would have resulted in the grievor being paid at step 5 of the AU-1 pay grid ($64 563), instead of at step 6 ($66 859), or in other words, a reduction in the rate of pay that she received at the AU-1 level.

[25] The grievor was informed that her pay would not be reduced, because “[i]n cases where the recalculation worked out to less than what was originally paid, we gave employees the higher of the former and latter results.” Thus, she was left at AU-1 step 6, rather than having her pay decreased to step 5.

[26] On March 29, 2018, PIPSC and the CRA signed the 2018 PIPSC collective agreement, with an expiry date of December 21, 2018.

[27] The grievor made a second inquiry of the CRA compensation office, and on June 6, 2018, someone from that office told the grievor that they had reviewed her pay file and had reached the same result as had the previous officer. The grievor was told that they would also review her file in light of the recent signing of the 2018 PIPSC collective agreement.

[28] The grievor filed her grievance on September 5, 2018. The grievance reads as follows:

I grieve my Employer’s failure to pay me the amount of retroactive pay due to me 150 days following the March 29, 2018 signing of the AFS Collective Agreement. This is in violation of the AFS collective agreement, including but not limited to Article 44, Article 47, Appendix ‘A’, Appendix ‘H’ as well as applicable legislation/policies.

 

[29] On the grievance form, in handwriting, are the words, “Compensation ticket # 200001646531 July 24, 2018 200001578239 June 19 2018.”

[30] The grievor was sent a third response to her inquires from the CRA compensation office on February 4, 2019. It again confirmed that her rate of pay had been calculated accurately in accordance with the rules in the Directive. The grievor wrote back that day and argued that the compensation office should apply section 2.6.6(c) of the Directive and increase her pay.

[31] On February 5, 2019, another officer replied, reiterating that the rules of the Directive would have resulted in the grievor being moved down a step but that the employer would not reduce her pay. They reiterated that the grievor’s appropriate rate of pay as of October 6, 2014, was $65 893 (step 5) and that her next increment date was accurately calculated as October 5, 2015.

[32] The employer responded to the grievance at the final level on February 19, 2020. It rejected the grievance for being untimely on the basis that the grievor had been told that there would be no change to her rate of pay on December 4, 2017, but she did not present her grievance until September 5, 2018, which was outside the time limit set out in the 2018 PIPSC collective agreement. The employer also rejected the grievance on its merits, stating that it had applied the Directive and calculated her pay under the collective agreement correctly. It also noted that her AU-1 appointment did not take place within the retroactive period set out at clause 44.05(iv) of the 2018 PIPSC collective agreement.

[33] The grievance was referred to adjudication on March 13, 2020, under s. 209(1)(a) of the Federal Public Sector Labour Relations Act (S.C. 2003, c. 22, s. 2; “the Act”).

[34] Without going into too much detail, I will also note the grievor’s submission that following the promotion at issue, she was subsequently promoted to positions at the AU-2 level in 2015, the AU-3 level in 2017, and the AU-4 level in 2021. She argued that flowing from the employer’s (alleged) error recalculating her AU-1 rate of pay, each of her subsequent promotions would have to be recalculated, and that therefore, she was underpaid from October 6, 2014, through August 30, 2023.

III. The Directive and the collective agreement

[35] To provide context for the reasons that follow, I will explain the Directive and introduce its relationship to the collective agreements at issue in this grievance.

[36] I begin by noting that this grievance is not the first time the Board has considered a grievance about the appropriate rate of pay involving a promotion to a position within the AU classification. There are two leading cases. Note that in this decision, “the Board” also refers to the current Board’s predecessors, including the Public Service Staff Relations Board.

[37] The first case is Lajoie v. Treasury Board (Revenue Canada, Taxation), [1991] C.P.S.S.R.B. No. 213 (QL) (upheld in Canada (Attorney General) v. Lajoie, [1992] F.C.J. No. 1019 (C.A.)(QL)). The grievor in Lajoie had been employed as a tax auditor by Revenue Canada, then a department under Treasury Board and the predecessor to what is now the CRA, which is a separate agency under the Act.

[38] The grievor in Lajoie had been employed at the PM-3 level (a position that would now be part of the SP group). He received a promotion to the AU-2 group and level, at step 2. Subsequent to the promotion, there was a retroactive revision to the AU-2 rates of pay. The employer applied what were then called the Public Service Terms and Conditions of Employment Regulations (“the TCOE Regulations”), recalculated the grievor’s rate of pay, and placed him once step lower at AU-2 step 1, retroactively.

[39] Both the Board and the Federal Court of Appeal (FCA) found the employer’s action in contravention of the collective agreement and the TCOE Regulations and ordered the grievor paid at the AU-2 step 2 rate of pay.

[40] The second case of note is Buchmann v. Canada Customs and Revenue Agency, 2002 PSSRB 14. By that time, the Department of National Revenue had become the Canada Customs and Revenue Agency (CCRA), a predecessor separate agency to the CRA. The grievor in Buchmann had been employed by the CCRA in a PM-2 position when he was promoted to an AU-1 position during the retroactive period of the collective agreement covering the PM positions. This is a similar situation to the one of the grievor in this matter.

[41] Under the CCRA, what were once the TCOE Regulations were replaced by its Terms and Conditions of Employment Policy (“the TCOE Policy”). The CCRA told the grievor in Buchmann that it was obligated to apply Lajoie and to use the “straight down” rule to determine that his step and rate of pay should not change.

[42] In Buchmann, the Board considered the collective agreement and the TCOE Policy and determined that the CCRA was obligated to recalculate the grievor’s AU-1 rate of pay. The result was a retroactive revision to a higher step and rate of pay within the AU-1 pay grid.

[43] The Directive at issue in this grievance is a replacement for the TCOE Policy. The Directive submitted by the parties has a version date of October 27, 2016, and an effective date of September 10, 2015. There is no indication from the parties that any substantive changes were made to the provisions relevant to this matter in the process of replacing the TCOE Policy with the Directive. In making their arguments about the treatment that the grievor received, they referenced the provisions in the Directive that they had provided.

[44] In all three collective agreements submitted by the parties in this matter — the 2014 PIPSC collective agreement, the 2016 PSAC collective agreement, and the 2018 PIPSC collective agreement, one can find references to the TCOE Policy.

[45] In the 2018 PIPSC collective agreement, the first reference is at clause 2.01, which defines the term “continuous employment” through a reference to the TCOE Policy. That definition is not relevant to the issues in this grievance.

[46] The second reference to the TCOE Policy is indirect and is found at clause 44.01. To understand that reference in context, I will present clauses 44.01 to 44.03, inclusive, as follows:

ARTICLE 44   PAY ADMINISTRATION	ARTICLE 44   ADMINISTRATION DE LA PAYE
44.01 Except as provided in clauses 44.01 to 44.08 inclusive and the Notes to Appendix “A” of this Agreement, the terms and conditions governing the application of pay to employees are not affected by this Agreement.	44.01 Sous réserve des paragraphes 44.01 à 44.08 inclusivement et des notes de l’annexe « A » de la présente convention, les conditions régissant l’application de la rémunération aux employés ne sont pas modifiées par la présente convention
44.02 An employee is entitled to be paid for services rendered at:	44.02 Un employé a droit à une rémunération pour services rendus :
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,	a. au taux précisé à l’annexe « A » pour la classification du poste auquel il est nommé si la classification coïncide avec celle qui est prescrite dans son certificat de nomination;
or	ou
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.	b. au taux précisé à l’Annexe « A » pour la classification prescrite dans son certificat de nomination, si cette classification et la classification du poste auquel il est nommé ne coïncident pas.
44.03 The rates of pay set forth in Appendix “A” shall become effective on the date specified therein.	44.03 Les taux de rémunération énoncés à l’annexe « A » entrent en vigueur aux dates qui y sont précisées.
[Emphasis added]

 

[47] A final and direct reference to the TCOE Policy is found at clause 44.05 of the 2018 PIPSC collective agreement, which reads as follows:

44.05 Rates of pay   a. Where the rates of pay set forth in Appendix “A” have an effective date prior to the date of signing of the collective agreement, the following shall apply:	44.05 Taux de rémunération   a. Lorsque les taux de rémunération énoncés à l’annexe « A » entrent en vigueur avant la date de la signature de la convention collective, les dispositions suivantes s’appliquent :
i. “retroactive period” for the purpose of subparagraphs (ii) to (v) means the period from the effective date of the revision up to and including the day before the collective agreement is signed or when an arbitral award is rendered therefore;	i. aux fins des sous-alinéas (ii) à (v), l’expression « période de rétroactivité », désigne la période qui commence à la date d’entrée en vigueur de la révision jusqu’à la date précédant la date de signature de la convention ou le jour où la décision arbitrale est rendue à cet égard;
ii. a retroactive upward revision in rates of pay shall apply to employees, former employees or in the case of death, the estates of former employees who were employees in the bargaining group during the retroactive period;	ii. une révision rétroactive à la hausse des taux de rémunération s’applique aux employés, aux anciens employés ou, dans le cas d’un décès, à la succession de l’ancien employé qui était un employé de l’unité de négociation pendant la période de rétroactivité;
iii. for initial appointments made during the retroactive period, the rate of pay selected in the revised rates of pay is the rate which is shown immediately below the rate of pay being received prior to the revision;	iii. pour les nominations initiales faites pendant la période de rétroactivité, le taux de rémunération choisi parmi les taux révisés de rémunération est le taux qui figure immédiatement dessous le taux de rémunération reçu avant la révision;
iv. for promotions, demotions deployments, transfers or acting situations effective during the retroactive period, the rate of pay shall be recalculated, in accordance with the CRA’s Terms and Conditions of Employment Policy, using the revised rates of pay. If the recalculated rate of pay is less than the rate of pay the employee was previously receiving, the revised rate of pay shall be the rate, which is nearest to, but not less than the rate of pay being received prior to the revision. However, where the recalculated rate is at a lower step in the range, the new rate shall be the rate of pay shown immediately below the rate of pay being received prior to the revision;	iv. pour les promotions, les rétrogradations, les déploiements, les mutations ou les affectations intérimaires qui se produisent durant la période de rétroactivité, le taux de rémunération doit être recalculé, conformément à la Politique sur les conditions d’emploi de l’ARC, en utilisant les taux révisés de rémunération. Si le taux de rémunération recalculé est inférieur au taux de rémunération que l’employé recevait auparavant, le taux de rémunération révisé sera le taux qui se rapproche le plus du taux reçu avant la révision, sans y être inférieur. Toutefois, lorsque le taux recalculé se situe à un échelon inférieur de l’échelle, le nouveau taux est le taux de rémunération qui figure immédiatement dessous le taux de rémunération reçu avant la révision;
v. no payment or no notification shall be made pursuant to clause 44.05 for one dollar ($1.00) or less.	v. aucun paiement ni avis n’est remis conformément au paragraphe 44.05 pour un dollar (1 $) ou moins.
[Emphasis added]

 

[48] The relevant language of the 2014 PIPSC collective agreement is identical to that cited from the 2018 one in the last paragraph. The language in the 2016 PSAC collective agreement is also, for all intents and purposes, the same; however, in that agreement, the pay administration provisions are found at article 62.

[49] I will turn now to considering the employer’s jurisdictional objections to the grievance, referencing the provisions just cited.

IV. The Board has jurisdiction to decide this grievance on its merits

[50] I will note that the employer did not raise an objection about the timeliness of the grievance within 30 days of being provided with the notice of the reference to adjudication, as required by s. 95(1)(a) of the Federal Public Sector Labour Relations Regulations (SOR/2005-79). Therefore, it waived the right to object to the timeliness of the grievance before the Board.

[51] Following the parties’ submission of an agreed statement of facts and their joint book of documents, the grievor’s bargaining agent made submissions on her behalf on June 15, 2023.

[52] In response to the grievor’s submissions, on July 7, 2023, the employer raised two objections.

[53] First, reflecting on the grievor’s submissions, it took the position that the grievance concerns only the Directive, which it said does not form part of a collective agreement between the parties. Because the grievance does not concern the interpretation of a collective agreement, it could not have been referred to adjudication under s. 209(1)(a) of the Act, it said.

[54] Second, it took the position that if the grievance does engage a collective agreement, it is not the 2018 PIPSC collective agreement but the 2016 PSAC collective agreement. If the grievance engages that agreement, the employer said, then it could have proceeded to adjudication only if the grievor was represented by the PSAC, under s. 209(2) of the Act.

[55] The Board requested PIPSC’s responses to the employer’s objections, and they were provided on July 24, 2023. In response to the preliminary objections, PIPSC said that the employer had violated article 44 and Appendix “A” of the 2018 PIPSC collective agreement. Specifically, it argued that the employer did not meet the requirements of clauses 44.02 and 44.05(iv). That latter provision directly references the TCOE Policy, and more generally, the employer relies upon the TCOE Policy to implement “Appendix ‘A’” of the collective agreement. The grievance it not about the interpretation of the 2016 PSAC collective agreement, it argued.

[56] On July 31, 2023, the Board directed that the matter proceed on both its merits and the preliminary objections at the same time. It issued revised dates for the employer’s written submissions (received August 11, 2023) and the grievor’s reply submissions (received August 29, 2023).

[57] The employer argued that this grievance does not engage clause 44.05 of the 2018 PIPSC collective agreement. It is correct on this point.

[58] Clause 44.05 explains what retroactive pay employees are due under the agreement. Critically, clause 44.05(a)(i) defines the retroactive period as “… the period from the effective date of the revision up to and including the day before the collective agreement is signed …”.

[59] The earliest effective date of a revision to the rates of pay in the 2018 PIPSC collective agreement was December 22, 2014. The agreement was signed on March 29, 2018. Therefore, the retroactive period, as defined by clause 44.05(a)(i), was from December 22, 2014, to March 28, 2018.

[60] The grievor’s promotional appointment to the AU-1 position took place on October 6, 2014. Therefore, it took place before the retroactive period in the 2018 PIPSC collective agreement. Clause 44.05 is not of assistance to the grievor. Her bargaining agent was wrong on this point.

[61] Clearly, the grievor was entitled to retroactive pay as a result of the 2016 PSAC collective agreement. Clause 62.03(b) of that agreement contains the same provisions as clause 44.05 of the 2018 PIPSC collective agreement. The retroactive period in the 2016 PSAC collective agreement began on November 1, 2012, and ended the day before that collective agreement was signed, on October 25, 2016. Clause 62.03(b)(ii) states that, as does clause 44.05(a)(ii), the retroactive pay applies to former employees. In this case, the grievor is an employee formerly in the SP bargaining unit.

[62] This is how the grievor received retroactive pay under the 2016 PSAC collective agreement for the period between November 1, 2013, and the day before she was promoted to the AU-1 position, October 5, 2014.

[63] However, this grievance is not about the grievor’s pay under the 2016 PSAC collective agreement. It is about the rate of pay she received in her AU-1 position, starting under the 2014 PIPSC collective agreement, dating from the date of her promotion, October 6, 2014.

[64] By the time she filed her grievance, the 2018 PIPSC collective agreement had been signed. Therefore, I consider the grievance as filed under that agreement.

[65] The PSAC is not involved in this matter. The grievance does not concern the rates of pay under the 2016 PSAC collective agreement. The employer was incorrect in arguing that the grievor required the PSAC’s support to refer this grievance to adjudication. None of the case law cited by the employer would suggest that the PSAC’s support is required for a grievance about pay rates under the 2014 and 2018 PIPSC collective agreements.

[66] I am reinforced in this conclusion by noting that the grievor in Buchmann was represented by PIPSC, as was the grievor in Lajoie. Like the grievor, both of those grievances concerned the correct rate of pay in the AU classification.

[67] So how then does this grievance engage the 2018 PIPSC collective agreement, and through it, the Directive?

[68] The 2018 PIPSC collective agreement is engaged because clauses 44.01 and 44.02, taken together, state that an employee is entitled to be paid at the correct rate of pay found in Appendix “A” to that collective agreement, in accordance with the classification of their position.

[69] This grievance asserts that the grievor was not being paid at the correct rate of pay in Appendix “A” of the 2014 and 2018 PIPSC collective agreements.

[70] As shown earlier in this decision, clause 44.01 states that “[e]xcept as provided in clauses 44.01 to 44.08 inclusive and the Notes to Appendix ‘A’ of this Agreement, the terms and conditions governing the application of pay to employees are not affected by this Agreement.” Neither party spoke directly to the interpretation of this clause, but I believe that it must be read as indicating that when determining the correct rate of pay under the collective agreement, one must look to “… the terms and conditions governing the application of pay …”.

[71] The employer would have me find that the Directive is not part of the collective agreement and that a grievance about it cannot be referred to adjudication under s. 209(1)(a) of the Act. It argued that the Directive is an employer policy adopted pursuant to the management powers granted to it by ss. 30(1) and 51(1) of the Canada Revenue Agency Act (S.C. 1999, c. 17). Policies adopted under the authority of the employer’s management rights are outside the scope of an adjudicator’s review, it argued; see Savard v. Treasury Board (Passport Canada), 2014 PSLRB 8 at para. 77. The proper recourse to challenge the interpretation of an application of the Directive is before the Federal Court, it argued; see Hagel v. Canada (Attorney General), 2009 FC 329.

[72] Not all references to a policy in a collective agreement mean that it is incorporated into that agreement, the employer argued; see Motamedi v. Canada Revenue Agency, 2013 PSLRB 50 at para. 12, and Brown and Beatty, Canadian Labour Arbitration, 5^th edition, at paragraph 4:5.

[73] If the parties intended to incorporate the TCOE Policy or the Directive into the collective agreement, they would have used express words to state that they “form a part of this agreement”, the employer argued; see Clerveaux v. Treasury Board (Correctional Service of Canada), 2006 PSLRB 7 at paras. 8 and 19.

[74] While the Directive may not form part of the agreement in the sense of being negotiated between the parties, that does not mean that it is not incorporated by reference or that the Board cannot look at it in interpreting and applying provisions of the collective agreement. Article 44 makes both indirect and direct reference to it. If the Board were to accept the employer’s argument, it would not be able to determine whether the grievor was being paid at the correct rate of pay in accordance with Appendix “A”. While a grievor may not be able to file a grievance about the interpretation and application of the Directive on its own, this is not what this grievance is about. Again, the 2018 PIPSC collective agreement provides that an employee is entitled to be paid at the correct rate of pay found in Appendix “A”. In the circumstances of this case, the Board must examine Article 44 of the collective agreement and, by reference, the Directive to determine that question.

[75] The Board came to similar conclusions concerning the predecessor documents to the Directive in both Lajoie and Buchmann. At paragraph 45 of the latter, the Board said this:

[45] The language that is in dispute arises from the newly negotiated collective agreement and the specific Terms and Conditions of Employment Policy incorporated by reference into the collective agreement between the parties.

[Emphasis added]

 

[76] The following key finding in Buchmann applied the rules in the TCOE Policy to determining the grievor’s correct rate of pay:

…

[55] Accordingly, the starting point for the grievor’s salary review was his present salary level at the time his new appointment was offered and accepted. On September 9, 1999 the grievor was a PM-02 at the third salary level. The retroactive effect of the new collective agreement increased his pay from $41,949 to $42,788 in that position. He was offered a promotion to the AU position. Therefore the calculation of his salary level in that new position must be based upon his PM salary of $42,788 as a result of the retroactive adjustment pursuant to the new collective agreement. It is from that salary that his salary for the promotion to the AU position is to be calculated. In other words, where an employee is promoted during the retroactive period of a collective agreement covering the position the employee is moving from, the employee’s salary in the new position must be recalculated based upon the retroactive salary.

…

[Emphasis added]

 

[77] Well before Lajoie and Buchmann, going back almost to the beginning of the collective bargaining relationship in Canada’s federal public service, the FCA addressed the relationship between a collective agreement and the rules with respect to pay administration found in what were then the TCOE Regulations. Attorney General of Canada v. Jones, [1978] 2 F.C. 39, stands for the proposition that when a collective agreement states that “… the terms and conditions governing the application of pay to employees are not affected by this Agreement”, those words have the effect of incorporating those terms and conditions.

[78] The grievor in Jones had been subject to a downward reclassification. The case is essential reading for students of how pay rules were affected by the implementation of new classification standards, which came into being at the time collective bargaining was established. It helps explain the history of how the “red circling” provisions currently found at clause 63.05 of the 2016 PSAC collective agreement and clause 44.06 of the 2018 PIPSC collective agreement came into being.

[79] The effect of the FCA’s decision was that the grievor gained entitlement to salary protection. Speaking of words similar to those found at article 44 of the 2018 PIPSC collective agreement (at clauses 32.01 and 32.05 in the agreement under review in that decision), the FCA said the following (at page 56):

… It was then suggested that a purpose of clause 32.05 was to limit the application of the Regulations, so included by clause 32.01, to the determination of the pay of appointees to converted positions. This would have been a strange way of achieving the purpose. I would have thought, if that were the purpose, that clause 32.05 would have provided in so many words that the Regulations would not apply to appointments to reclassified positions. But that is not what the clause provides. It provides affirmatively for matters that would already be covered by clause 32.01 if that clause incorporated the Regulations by its reference to “the terms and conditions governing the application of pay to employees”.

[Emphasis added]

 

[80] For a further confirmation of this approach, see Copeland v. Treasury Board (Solicitor General Canada - Correctional Service), 2003 PSSRB 19, in which the Board applied Lajoie and Buchmann when granting a grievance following the application of the Terms and Conditions of Employment Policy in effect at that employer; see paragraphs 40 to 42.

[81] Finally, see also Broekaert v. Treasury Board (Correctional Service of Canada), 2005 PSLRB 90, building on Jones, in which the Board concluded as follows at paragraphs 29 and 30:

[29] As both representatives have indicated, there is nothing in article 50 concerning pay increments, and therefore under clause 50.01, the collective agreement refers us to the terms and conditions governing the application of pay. In interpreting a similar clause, adjudicator Kwavnick, found in Adamson (supra), that the Terms and Conditions of Employment Regulations “have been incorporated into the collective agreement, to the extent that they are not inconsistent therewith”. The Federal Court of Appeal ruled similarly in Attorney General of Canada v. Raymond Keith Jones, [1978] 2 F.C. 39. Justice Ryan specified, at paragraph 42, that a similar clause refers to “terms and conditions governing pay appearing principally, if not exclusively, in the Public Service Terms and Conditions of Employment Regulations”.

[30] Therefore, a grievance is adjudicable under 92(1)(a) of the PSSRA with respect to the interpretation or application of the collective agreement, which incorporates by reference “the terms and conditions governing the application of pay”.

[Emphasis added]

 

[82] I do recognize that in Savard, the Board accepted that an adjudicator appointed under the Act does not have jurisdiction to hear a grievance about the employer’s terms and conditions of employment policy; see paragraph 77. However, the issue in Savard was whether to grant an application to extend the timelines for filing a grievance and making a referral to adjudication. The Board’s comment was made during its consideration of the criteria for granting an extension of time in Schenkman v. Treasury Board (Public Works and Government Services Canada), 2004 PSSRB 1. I am not satisfied that the Board fully explored the issue of whether it had jurisdiction. There is no indication that in reaching its conclusion, the Board considered Jones, Lajoie, Buchmann, Copeland, or Broekaert.

[83] Furthermore, in paragraph 77 of Savard, the Board went on to state as follows:

77 … There is insufficient evidence before me to come to a conclusion that the issue in question here does not fall under the collective agreement. There is at least an arguable nexus between the grievance and the wording of the collective agreement. It may be that the evidence and argument on the merits of the case establish that the relevant provisions of the collective agreement apply. …

 

[84] In other words, I believe that the Board’s conclusion in Savard is more nuanced than the employer suggests. It is not inconsistent with my conclusion that a grievance about the Directive alone may not be referrable to adjudication, but that the Board can look to the Directive in in interpreting and applying certain provisions of the collective agreement.

[85] It should be kept in mind that this grievance is about whether the grievor should have been entitled to the rate of pay at step 7 of the AU-1 pay grid, as of October 6, 2014, instead of the rate of pay at step 6, given that her acting rate of pay in the SP-07 position was higher than step 6 and lower than step 7. It is hard to imagine a pay grievance more central to the employer-employee relationship than this one.

[86] The clear wording of the collective agreement at Article 44 of the 2014 and 2018 PIPSC collective agreements, entitling the grievor to the correct rate of pay, and the preponderance of the jurisprudence, leads me to conclude that in determining this grievance, the Board has jurisdiction to consider the application of the Directive.

[87] The remaining question is whether the employer correctly applied its Directive when determining the grievor’s rate of pay in Appendix “A” of the 2014 and 2018 PIPSC collective agreements.

V. The employer calculated the grievor’s rate of pay correctly under the Directive

[88] Within the Directive, the promotion/transfer rule applicable to the grievor is set out at Appendix B, sections 3.2.2 and 3.2.3, which read as follows:

Rate of pay on promotion	Taux de rémunération au moment de la promotion
3.2.2 The appointment of a person described in subsection 3.2.1 constitutes a promotion where the maximum rate of pay applicable to the position to which that person is appointed exceeds the maximum rate of pay applicable to the person’s substantive level immediately before that appointment by:	3.2.2 La nomination d’une personne désignée au paragraphe 3.2.1 constitue une promotion lorsque le taux de rémunération maximal applicable au poste auquel cette personne est nommée dépasse le taux de rémunération maximal applicable au niveau de titularisation de la personne immédiatement avant cette nomination :
a. an amount equal to at least the lowest pay increment for the position to which he or she is appointed, where that position has more than one rate of pay; or b. an amount equal to at least 4% of the maximum rate of pay for the position held by the person immediately prior to that appointment, where the position to which he or she is appointed has only one rate of pay.	a. d’un montant au moins égal à la plus faible augmentation prévue pour le poste auquel la personne est nommée, lorsque le poste comporte plus d’un taux de rémunération; b. d’un montant de 4% ou plus du taux maximal pour le poste qu’elle occupait immédiatement avant cette nomination, lorsque le poste auquel la personne est nommée ne comporte qu’un seul taux de rémunération
3.2.3 Subject to subsections 3.2.8, 3.2.10 and 3.2.11, the rate of pay on promotion is to be the rate nearest to which the person was entitled in his or her substantive level immediately before the appointment that gives the person an increase in pay as specified in subsection 3.2.2 above.	3.2.3 Sous réserve des paragraphes 3.2.8 et 3.2.10 et 3.2.11, le taux de rémunération à la promotion est le taux le plus proche du taux auquel la personne avait droit à son niveau de titularisation immédiatement avant la nomination qui lui vaut une augmentation telle que le stipule le paragraphe 3.2.2 ci-dessus.
[Emphasis added]

 

[89] Confirmed by the email that the CRA compensation office sent to the grievor on December 4, 2017, the promotion/transfer rule was applied to her situation because the AU-1 maximum rate ($72 532) was higher than the SP-05 maximum rate ($59 713) by at least the smallest pay increment in the AU-1 pay grid ($2281). On appointment, applying section 3.2.3 to the grievor’s situation resulted in the following:

· the grievor’s substantive SP-05 rate of pay was $59 713 (step 5);

· the smallest pay increment in the AU-1 grid was $2281;

· her pay on promotion would have had to be at least $61 994; and

· the nearest next-highest AU-1 rate would have been step 4, $62 265.

 

[90] Using the revised PSAC rates, the retroactive application of the promotion/transfer rule resulted in the following:

· the grievor’s substantive revised SP-05 rate of pay was $61 974 (step 5);

· the smallest pay increment in the AU-1 grid was still $2281;

· her pay on promotion would have had to be at least $64 255; and

· the nearest next-highest AU-1 rate became step 5, $64 563.

 

[91] Within the Directive, the “subsequent acting” rule applied to the grievor’s situation because she was receiving acting pay at the SP-07 level when she was appointed to the AU-1 position. The applicable rule is set out at section 7.6.1, which reads as follows:

7.6 Subsequent appointments or transfer by appointments in substantive position while acting	7.6 Nominations ou mutations latérales permanentes subséquentes à un niveau de poste d’attache pendant une affectation intérimaire
7.6.1 A person in receipt of acting pay who is appointed to a new substantive level that is:	7.6.1 Toute personne qui reçoit une rémunération d’intérim et qui est nommé à un nouveau niveau de niveau de titularisation qui est :
…	[…]
b. higher than that for which acting pay is being paid will:	b. supérieur à celui pour lequel la rémunération d’intérim est versée :
i. be paid at the rate of pay calculated following the promotion or transfer by appointment rules in subsection 3.2; and	i. reçoit le taux de rémunération calculé conformément aux règles régissant la promotion ou la mutation par nomination énoncées au paragraphe 3.2; et
ii. should such rate of pay be less than the person’s previous acting rate of pay, be paid at the rate of pay in the higher rate of pay range that is nearest to but not less than the previous acting rate of pay.	ii. si ce taux est inférieur au taux de rémunération d’intérim précédent, elle reçoit le taux de rémunération de l’échelle salariale plus élevée le plus proche du taux de rémunération d’intérim précédent, sans lui être inférieur.
c. lower than that for which acting pay is being paid will: i. be paid at the rate of pay calculated following the promotion or transfer by appointment rules in subsection 3.2; and ii. receive credit for increments from the date the acting duties in the higher level position commenced, in accordance with the provisions of subsection 7.4.	c. inférieur à celui pour lequel la rémunération d’intérim est versée : i. reçoit le taux calculé conformément aux règles régissant la promotion ou la mutation par nomination énoncées au paragraphe 3.2; et ii. se voit créditer la période pendant laquelle elle a occupé le poste de niveau supérieur, soit à compter de la date à laquelle les fonctions intérimaires dudit poste ont commencé, conformément aux dispositions du paragraphe 7.4.

 

[92] Confirmed by the email that the CRA compensation office sent to the grievor on December 4, 2017, the subsequent acting rule that applied to the grievor’s situation at the time her promotional appointment was made was section 7.6.1(b) because, at the time, the maximum rate of pay of the AU-1 level ($72 532) was higher than the maximum rate of pay of the SP-07 level ($69 907).

[93] This resulted in the following:

· the grievor’s acting SP-07 rate of pay was $65 893 (step 3);

· the nearest next-highest rate of pay in the AU-1 grid was step 6, $66 859; and

· her next increment date was determined to be October 6, 2015.

 

[94] However, once the retroactive SP-07 rates were implemented, the maximum rate of pay of the SP-07 level ($72 554) became higher than the maximum rate of pay of the AU-1 level ($72 532).

[95] Consequently, the CRA compensation office determined that the grievor’s situation was covered by the subsequent acting rule at section 7.6.1(c), resulting in the following:

· the application of the promotion/transfer rule had placed the grievor at step 5 of the AU-1 grid, $64 563, and the approximately nine months the grievor had spent acting at the SP-07 would count toward an increment date;

· this would have left the grievor at step 5 of the AU-1 grid on appointment, resulting in a reduction of her pay in the AU-1 position from what had originally been calculated; and

· however, the employer did not reduce her pay to step 5; instead, the grievor was left at the AU-1 step 6 rate of pay.

 

[96] In the application of the rule at s. 7.6.1(c), the grievor’s revised acting SP-07 rate of pay of $68 388 (step 3) was not a factor.

[97] The grievor argued that the employer should have used her revised SP-07 rate and recalculated her pay on the same basis as it was originally calculated. She argued that she should have been placed at the nearest next-highest rate on the AU-1 grid, step 7 ($69 158). She submitted that her entitlement flows from the fact that she accepted the AU-1 appointment because the rates were higher than those of her acting SP-07 position. She argued that the employer could not change the methodology for determining her pay more than two years after she accepted the appointment. Had the pay grid been up to date at the time, it is hard to imagine why she would have accepted an appointment, knowing that her actual rate of pay would decline, she argued.

[98] The grievor argued that Buchmann stands for the proposition that a promotion and pay level on appointment must be maintained following the recalculation of wage rates during the retroactive period. She argued that a recalculation of wage rates was required, to maintain the promotion.

[99] The grievor in Buchmann had been promoted from a PM-2 position to an AU-1 position in a situation in which the PM-2 rates were expired. To that extent, it is a similar situation to the one in this grievance. As already noted, the Board’s key finding in Buchmann was succinctly stated as follows:

[55] … In other words, where an employee is promoted during the retroactive period of a collective agreement covering the position the employee is moving from, the employee’s rate of pay in the new position must be recalculated based upon the retroactive salary.

[Emphasis added]

 

[100] However, there is a key factual difference between the grievor’s situation and that of the grievor in Buchmann. There is no indication that he was receiving acting pay at the time of his promotion. He was promoted from one substantive position (PM-2) to another (AU-1).

[101] Following Buchmann, when there is a retroactive change in the rate of pay from which an employee is moving, a recalculation of the promotional rule must be done. That is precisely what the employer did in this situation. The original calculation at the time of the promotion, based on her substantive position, would have placed her at step 4 ($62 265); the recalculation, once the new PSAC rates were implemented, would have placed her at step 5 ($64 563).

[102] What is truly at issue in this grievance is the application of the subsequent acting rule.

[103] The grievor believes it unfair that the result of this interpretation is that on October 6, 2014, her actual rate of pay declined from the acting SP-07 PSAC rate of $68 388 to the AU-1 rate of $66 859.

[104] However, the grievor has not convinced me that it is appropriate to waive the application of the plain language of section 7.6.1(c) and apply the language of section 7.6.1(b). The clear and unambiguous wording of section 7.6.1(b) is that it applies when the maximum rate of pay in the acting group and level is lower than the maximum rate of pay in the group and level to which the appointment is being made. That was the situation at the time the promotional appointment was made. The clear and unambiguous wording of section 7.6.1(c) is that it applies when the maximum rate of pay in the acting group and level is higher than the maximum rate of pay in the group and level to which the appointment is being made. That was the situation once the revised PSAC rates were put into place.

[105] The grievor did not provide evidence that she relied on receiving an increase in pay rates from her acting SP-07 role when she accepted the AU-1 appointment. While it is logical to argue that receiving an increase might have been a factor in her choice, it is also clear that her appointment to the AU-1 position represented a significant promotion from her substantive SP-05 position both at the time of and following the recalculation.

[106] It is also clear that the grievor was subsequently promoted to the AU-2, AU-3, and AU-4 levels. This at least suggests that the acceptance of the AU-1 promotion placed her on a career path for subsequent promotions.

[107] In any case, the grievor did not argue detrimental reliance.

[108] The grievor argued alternatively that if section 7.6.1(c) applies, the employer miscalculated her increment date. She argued that it should have provided her with increments from the date on which the acting duties in the higher-level position commenced, i.e., January 13, 2014. She argued that therefore, she should have received an increment from her AU-1 rate of pay on January 12, 2015, not on October 5, 2015, as determined by the employer.

[109] Again, I disagree. The rule at section 7.6.1(c) sets out how to calculate the increment date applicable to the rate of pay determined following the application of the promotion/transfer rule. In other words, the grievor’s nine months of acting at the SP-07 level would have factored into the determination of the increment date for an increase from AU-1 step 5 to step 6. In her situation, the increment date would have been January 12, 2015.

[110] However, the employer determined that the grievor would continue to be paid at AU-1 step 6, effective October 6, 2014. This effectively accelerated her placement at step 6, compared to a pure recalculation. I find this consistent with the straight-down rule that follows Lajoie. Given that, maintaining the grievor’s next increment date as October 5, 2015, was the correct decision.

[111] The grievor also argued but has also not convinced me that the application of the rules set out in sections 7.3 and 7.4 of the Directive would result in a change to her increment date. Section 7.3 states that acting pay will be recalculated following a retroactive revision of rates. The SP-05 rates and the SP-07 rates were recalculated at the same time, and the grievor did not submit that her acting pay in the SP-07 role should have been changed. Section 7.4 provides further details with respect to the increment dates applicable to an employee in an acting-pay situation. That rule would apply to her increment date at the SP-07 level but not to the increment date at the AU-1 level. Her appointment to the AU-1 level was not an acting-pay situation; it was a promotion, and therefore was subject to section 7.6, as discussed earlier in this decision.

[112] For all of the above reasons, the Board makes the following order:

(The Order appears on the next page)

VI. Order

[113] The employer’s objections to the Board’s jurisdiction are dismissed.

[114] The grievance is denied.

February 14, 2025.

David Orfald,

a panel of the Federal Public Sector

Labour Relations and Employment Board