City's payment of moving expenses fell under union's bargaining jurisdiction, says union
This instalment of You Make the Call features a labour dispute over an employer’s right to negotiate relocation payments for new hires.
The City of Calgary was having difficulty finding and keeping drivers for its municipal transit service. The problem had been going on for several years until the city decided to try recruiting drivers at Toronto career fair.
The city was able to find several people interested and outlined the terms and conditions of the job offer. This was followed by a formal offer of employment either mailed to them or given to them at a documentation session.
As a way to encourage potential applicants, the city offered to help cover relocation costs in the employment offer. Each of the applicants from Toronto was offered a lump-sum payment of $1,500, which was payable upon successful completion of the 21-day training period.
At the time, the city had relocation guidelines that allowed higher-classification employees or those hired in hard-to-recruit positions up to 15 per cent of their salary, depending on where they were relocating from. The relocated employee had to provide original receipts to verify the expenses.
The guidelines also provided a lump sum payment option of up to $4,500 to a new employee relocating from Ontario or farther east, with lower amounts for those coming from closer locations. The city could choose to give all or part of the payment before the new employee started work. For both options, new employees had to sign agreements they would repay at least some of the money if employment was terminated early.
The union complained the city overstepped its bounds in the context of the collective agreement and labour law. It said it had the exclusive right to bargain terms and conditions of employment and the collective agreement was in effect as soon as employees were hired. The union argued the relocation expense policy came into effect after someone was hired and the payment was made after the employment relationship began. This made relocation costs a term or condition of employment.
After the union filed its grievance, the city implemented a new relocation policy that required receipts for lump sum payments so actual expenses could be reimbursed. The prospective employee would have to sign a relocation contract outlining the amount and repayment obligations in the event of early termination.
You Make the Call
Were the relocation expenses agreements outside of the union’s negotiating jurisdiction?
Did the agreements fall within the union’s jurisdiction?
If you said the relocation payments were related to employment and fell under the union’s jurisdiction, you’re right.
The Alberta Arbitration Board agreed that anything regarding the terms and conditions of employment fell under the jurisdiction of collective bargaining with the union, regardless of whether it was part of a pre-employment contract or covered in the collective agreement. However, it said there was still a role for “individual contracts between employer and employee” at the pre-employment stage as long as they were confined to the “act of hiring” and didn’t conflict with the collective agreement.
The board found the old guidelines in effect at the time of the hiring of the Toronto applicants crossed the line into collective bargaining territory. Because no receipts were required for the lump sum payment and the amount was the same regardless of the actual expenses, the payment was similar to a hiring bonus, which was compensation and must be negotiated with the union. The policy also only paid relocation expenses once employment was established, which put it beyond the act of hiring.
The board ruled the city’s relocation expense agreement violated the union’s exclusive bargaining rights. However, it noted the new guidelines were valid and permissible if signed as a pre-employment contract because they only paid actual expenses. See A.T.U., Local 583 v. Calgary (City), 2008 CarswellAlta 2240 (Alta. Arb. Bd.).