Must change collective agreement: Arbitrator
An Ontario company has been unsuccessful in its attempt to avoid paying two separate shift premiums to employees who qualify for both without negotiating a change in the collective agreement.
Dufferin Aggregates is a company based in Concord, Ont., that operates a quarry in the Halton region. Since 1978, Dufferin Aggregate’s collective agreement stipulated that the hours of work for its employees were nine hours at straight time rates from Monday to Friday.
There was also a provision that stated employees would be paid time and one-half for all hours worked in excess of nine hours in a day or all hours on Saturdays. In addition, overtime was to be voluntary and distributed equally among employees performing similar work.
However, another article in the collective agreement stipulated that hours scheduled before the start of an employee’s shift would also be paid at time and one-half.
Sometimes, Dufferin Aggregates required employees to report for work up to two hours before the start of their shift — usually maintenance employees on the 7 a.m. day shift who had to clear access roadways of snow before the shift started or shipping employees who had to receive or prepare materials before the shift started to maximize production.
The company’s normal practice was to pay employees who reported two hours early, time and one-half, then pay them at the straight-time rate for the first seven hours of their shift. Then, since they had worked nine hours at that point, the last two hours of their regular shift was paid at the overtime rate.
As a result, employees who were called in two hours early worked 11 hours in total and received time and one-half pay for four of those hours.
At one point, Dufferin Aggregates determined that it had been misinterpreting the collective agreement all those years. It had no issue with paying employees time and one-half for coming in early, but it believed paying the overtime rate for the last two hours of the shift was incorrect.
According to the overtime provision, employees had to work their entire nine-hour shift before becoming eligible for overtime pay. Since the pre-shift hours weren’t part of the regular shift, they shouldn’t count when determining overtime eligibility, the company believed.
When collective bargaining began for renewal of the collective agreement, Dufferin Aggregates gave the union — Unifor, Local 266 — notice that it would be reinterpreting the overtime provision, but not changing it. Unifor disagreed, but it didn’t affect the collective bargaining process and the collective agreement was renewed without any changes to the overtime provision or the pre-shift pay provision.
After the new agreement was completed, the first time Dufferin Aggregates scheduled employees to work two hours before their regularly scheduled nine-hour shift and didn’t pay them time and one-half for the last two hours, Unifor filed a grievance.
Unifor argued that the collective agreement was “clear and unambiguous” regarding overtime: All hours worked beyond nine in one day were to be paid at the overtime rate. When employees were required to work two extra hours before the start of their shift, it made the last two hours overtime hours, the union said.
In addition, Dufferin Aggregates had been paying time and one half rates for both the pre-shift hours and the final two hours of the shift that surpassed the daily total of nine hours, so it was established past practice for more than three decades and the company couldn’t just change it without changing the agreement, Unifor argued.
Arbitrator Gordon Luborsky found both sides had reasonable grounds for their interpretation, but the relevant contractual language was not “sufficiently clear and unambiguous to overcome the reasonable expectations of the parties cemented during 35 years of a consistent past practice over many collective agreements terms, that I must conclude has crystallized into the shared intention of the parties on the matter.”
Luborsky noted that there was no language in the collective agreement that expressly prohibited “any form of pyramiding of benefit payments by counting the same hours of work for two premium purposes.”
The time and one-half rates for pre-shift work was a separate premium from overtime rates, and there was nothing in the agreement that indicated that the payment of one premium to an employee made that employee ineligible for the other premium, said Luborsky.
Luborsky added that the overtime premium’s language that “all hours worked” in excess of nine hours was broad enough to include any time of more than nine consecutive hours and its plain meaning should be interpreted to included any consecutive hours worked before the start of a shift.
He also pointed out that a letter of intent discussing overtime guidelines in the collective agreement suggested pre-shift hours were not considered a form of overtime, particularly since they were usually assigned and not voluntary, said Luborsky.
While Luborsky agreed with the company’s point of view that it may not have been the original intent of the parties to duplicate hours of work for two premium payments, the fact that the company did pay both premiums for employees called in for pre-shift work for 35 years made it difficult to support the company’s argument and instead indicated it was the “shared intention of the parties to count the employee’s continuous work as a single block, resulting in the payment of both a premium calculated at one and one-half times the straight time rate for the two hours before the commencement of the shift, and a second premium at the same rate for the last two hours of the regularly scheduled nine-hour shift.”
“It is my opinion that evidence of such a clear and consistent practice over so many years is sufficient to trump the presumption against pyramiding, and does so in the factual circumstances of the instant case,” said Luborsky.
Luborsky allowed Unifor’s grievance, finding Dufferin Aggregates was bound to follow the way it had interpreted the agreement for 35 years and pay both premiums to employees who worked pre-shift hours.
For more information see:
• Dufferin Aggregates and Unifor, Local 266 (Violation of Premium Calculation Obligations), Re, 2016 CarswellOnt 19796 (Ont. Arb.).
