Bargaining proposal did not mention statutory holidays specifically
After bargaining concessions on overtime rates, the employer attempted to apply the new pay scale to work performed on holidays. The union grieved.
The employer — a producer of packaging extrusion — operated numerous plants in the United States and Canada. The facilities maintained a continuous, 12-hour schedule. Except for Christmas and New Year’s, employees were routinely expected to work statutory holidays. According to the terms of the collective agreement, workers were paid 1.75 times their regular rate for overtime and for work performed on statutory holidays.
In negotiations for a new collective agreement in the fall of 2009, the employer was seeking significant concessions from the union.
Pleading difficult economic times, the employer asked for a 25 per cent reduction in wages. The employer also said that the 1.75 holiday pay rate was anomalous and it proposed standardizing all overtime — including holiday pay — to the 1.5 rate that it paid out at all its other branches. This change was necessary, the employer said, in order to remain competitive. The employer said that its proposed changes to holiday pay would not come into effect until the following February.
The union rejected the proposals and commenced a legal strike in December 2009.
Pension wiggle
The parties resumed negotiations to consider the union’s counter offer of a 15 per cent wage reduction in combination with a “wiggle” in pension provisions.
The employer ultimately accepted that offer and the 1.50 pay rate for overtime.
The agreement was ratified and a draft was sent to the union. The agreement pegged the premium overtime rate at 1.50 as agreed, however, the agreement also fixed the holiday pay rate at 1.5. The union protested and then grieved when the employer paid the 1.50 rate to workers who worked the Good Friday statutory holiday.
The union argued that the 1.50 rate applied only to overtime. The proposal in question dealt specifically with overtime, not holiday pay, the union said. It was agreed that the two were not the same and, even if there was ambiguity with respect to the scope of the proposed rate reduction, that ambiguity should not be counted against the union.
Other entitlements
The employer agreed that the section of the agreement in question contained other entitlements and allowances in addition to “overtime,” but it argued that its intention was clear from the outset. It had stated explicitly that it wanted to standardize all overtime/premium rates at 1.50 of wages. It was unreasonable for the union to interpret its proposals in any other manner, the employer said.
The Arbitrator sided with the union.
“I accept that [the employer’s negotiator] honestly intended to propose the elimination of the 1.75 rate from all allowances, but he did not express his proposal in this way. Rather he made it expressly applicable only to overtime. It was not unreasonable for the Union to have interpreted the proposal as written and pertaining only to overtime, particularly in light of the fact that it was well known that the employer had distinct premium rates for overtime and holiday pay in other facilities. As counsel for the Employer has acknowledged, work on a holiday as set out in [the collective agreement] is not overtime. Therefore the Employer proposal, written as a proposal regarding overtime, would not have applied to that article.”
The employer was in breach of the collective agreement, the Arbitrator said.
“[I] declare that the rate to be paid for work on a holiday [under the collective agreement] is 1.75 times the regular rate, and that the Employer has violated the agreement by failing to pay that rate.”
