Voluntary exit program

Employer not required to declare a position surplus to permit an employee to participate in program

Boeing Toronto Ltd. wanted to reduce its workforce. To accomplish this, it entered into a voluntary exit program in 1998 with the union representing its employees, namely the National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-CLC), Local 673.

The program provided that eligible employees would be paid the equivalent of severance pay under the Employment Standards Act, that is one week’s pay per year of service to a maximum of 26 weeks. In order to be eligible there had to be a declaration of surplus in the employee’s job classification and the employee had to file an application and acceptance for the voluntary exit program.

A second agreement was signed in September 2000 which permitted senior employees in an affected classification to elect the voluntary exit program in order to avoid the layoff of more junior employees.

Margaret Treasure, 64, was one year away from mandatory retirement. She decided to take advantage of the voluntary exit program. She applied for the program but her application was not approved because her classification was not declared surplus.

Ms. Treasure continued working until she reached the mandatory retirement age when she retired and commenced receiving her pension.

The union grieved on behalf of Ms. Treasure, alleging that Boeing Toronto breached the collective agreement clause dealing with discrimination in its failure to allow Ms. Treasure to avail herself of the voluntary exit program. The union took the position that, because Ms. Treasure was 64 years old and close to the mandatory retirement age, the company chose not to declare her surplus thereby denying her access to the program. The company denied the allegation of discrimination. It took the position that, because there was sufficient work, it simply allowed attrition to occur.

The arbitrator held that there was no obligation upon the company to declare an employee surplus where there is sufficient work to keep the employee productively employed. Although Ms. Treasure’s position was not filled following her retirement, Ms. Treasure continued to be productively employed up until her retirement. As well, none of the other workers in her classification were under-utilized in order to avoid having to declare Ms. Treasure surplus.

The absence of a surplus declaration constituted a legitimate bar to Ms. Treasure’s access to the voluntary exit program. Although the company had made a surplus declaration in order to permit two other employees to access the voluntary exit program, there was no obligation on the company to declare Ms. Treasure’s position surplus.

The grievance was therefore dismissed.

For more information:

Boeing Toronto Ltd. v. CAW-CLC, Local 673, Arbitrator Kevin M. Burkett, Grievance No. #W18/01, July 5/01.

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