Nestlé’s new payroll system gets green light

Food and beverage manufacturer Nestlé Canada got the go-ahead from an arbitrator to change its payroll practice at its Ontario operation, despite the union’s objection.

Around October 2014, Nestlé initially advised the union and employees of its intention to change its weekly payroll system to a bi-weekly system.

Then, in May 2015, the employer formally notified employees it would be replacing the weekly payroll system with a bi-weekly one, effective July 1, 2015.

The union, Unifor’s Local 252 chapter, filed a grievance based on two arguments. First, Unifor argued the employer is estopped from altering its payroll practice to adopt a bi-weekly payroll system.

Because Nestlé Canada had a consistent past practice of using a weekly payroll system, it should be considered an entrenched and consistent one, and therefore not subject to change arbitrarily, the union said.

Arbitrator has his say

However, arbitrator Norm Jesin sided with the employer in that regard.

"I am of the view that a practice, even a long-standing and consistent practice, of an employer exercising its management rights in a particular way does not in and of itself amount to a representation that the employer will not change its practice," Jesin said.

"It remains within the employer’s rights to change that practice."

Secondly, Unifor argued that the collective agreement implied an intention by both parties to enshrine a weekly payroll system.

The employer again disagreed, and so too did the arbitrator.

"To the extent that there are references in the collective agreement, I am not persuaded in all the circumstances that those references establish a clear intention of the parties to enshrine a weekly payroll system," Jesin said.

In addition, the union failed to show that the introduction of a bi-weekly payroll system had any substantive impact on the rights and entitlement of the employees at Nestlé, under the collective agreement.