Layoff ruling ‘significant victory’ for union

Province’s need cannot justify violation of collective agreement
By Gordon Sova
|hrreporter.com|Last Updated: 09/25/2009

On June 19, the Supreme Court of Newfoundland and Labrador accepted an arbitrator’s award as reasonable and rescinded the layoffs of provincial roads workers.

In 2005, the Department of Transportation and Works decided to eliminate 13 highway maintenance crew headquarters for the summer and to allot the work they would have done to the remaining headquarters. The employees working out of the eliminated locations could not bump because their seniority applied only to their own headquarters. In the fall, the 13 headquarters were re-opened for the winter maintenance season. This annual pattern continued up to the present.

The union, the Newfoundland and Labrador Assn. of Public and Private Employees, grieved. The province argued that it was acting within its management rights. The union claimed that the government’s actions had made seniority, layoff and recall provisions of the agreement meaningless.

The chair of the arbitration board, John A. Scott, commented on the government’s position that it had made its decisions due to a lack of work. Scott noted that “the definition of layoff agreed by the Parties uses the phrase ‘lack of work’, not lack of ‘meaningful work’, or of ‘effective work’ or of ‘efficient work’.” There remained work to do — it was just being done by employees from different crews.

The background of the layoffs was a severe budget shortfall on the part of the Department. The layoffs were a response to that crisis. The arbitrator commiserated, but he could not allow that to justify the actions. “As in Re Corporation of the County of Huron, so too in the instant matter, it is not open to this Board ‘to rewrite the bargain that the parties had negotiated based on the reality of the financial situation facing the employer.”

The Court found that the award was “transparent, intelligently presented and justified” and, therefore, reasonable.

Also at issue was a 1993 Memo of Understanding (MOU) on amalgamation of Units. The union argued, and the arbitrator accepted, that that MOU, though no longer part of the agreement, had created an estoppel. The Court found that the arbitrator was correct in ruling that the estoppel existed.

Testimony before the Board showed that competent government officials continued using the framework of the MOU, despite the fact that it was no longer in the contract. There was no date of expiry in the MOU. Further, the union relied on that continuing understanding in their dealings and negotiations with the employer.

The decision means between $5 million and $6 million in back wages and benefits, as well as restored seniority for the affected employees.