Arbitrator rejects low-ball severance offer

Long-service employee signed release after turning down job 800 kilometres away

The International Union of Operating Engineers (IUOE) filed a grievance after a worker in British Columbia was forced into retirement and induced to sign a release that sought to reduce her severance pay under the collective agreement.

The woman was employed as a parts journeyperson at Williams Machinery, an industrial machine dealer that specializes in the sales and service of forklifts and small loaders. The company operates a number of locations in B.C.

She had 26 years’ service working at the company’s location in Richmond when she was informed on March 13, 2012, it was moving her job to Prince George, about 800 kilometres away. The worker was given seven days to consider the employer’s offer to relocate. The employer would not pay for moving expenses.

Citing her ties to her community and her husband’s reliance on access to specialized medical care, she reluctantly declined the employer’s offer.

On March 22, she received a letter from the employer acknowledging her "decision to retire" as of April 27. The letter said she would receive four weeks’ salary to assist in her transition in addition to payments for any unused vacation time. In return, the worker was asked to acknowledge she had no further claims arising from her employment. She signed the letter and returned it as requested.

The union said she had been forced to retire and that she was entitled to one week’s pay per year of service (to a maximum of 17 weeks) under collective agreement provisions that addressed the potential for job loss due to amalgamation, plant closure or automation.

The employer said there was no amalgamation. All its locations were included in one bargaining unit and it was entitled to move work within the bargaining unit as it saw fit. There was a job for her in Prince George, the employer said. She refused to take it. She also had the option to take a layoff over the offered transfer, the employer said, but she didn’t do that either. She was not forced to retire, the employer said.

The arbitrator disagreed. The arbitrator rejected the employer’s argument there had been no amalgamation according to the terms of the collective agreement: "That is precisely what happened. All journeypersons were combined or united in Prince George. There was an amalgamation of journeypersons in Prince George. It was done to create a centre of excellence by bringing the parts persons together in one location."

The key question, the arbitrator said, was whether or not the amalgamation caused her to lose her job. The arbitrator said it did. The employer’s assertion she had made a "choice" did not stand up to scrutiny, and ignored the "real life implications" of what the employer was asking her to do.

"The ‘choice’ presented to her was not a real one. The amalgamation of the journeypersons in Prince George caused (her) to lose her employment with the employer. In the circumstances of the present case, I am unable to accept the employer’s submission that she was not forced to retire. Given the so-called ‘choice’ put to her, she was effectively forced to retire."

The arbitrator said she was entitled to 17 weeks’ severance pay according to the terms of the collective agreement. The release she signed did not change that.

Severance pay was a matter covered by the collective agreement. The union was the sole bargaining agent for the workers employed by the company.

"There is no room left for private negotiation between the employer and an employee… with respect to her giving up her right to severance pay, by her agreeing that ‘there are no claims arising from (her) employment.’ The employer could only negotiate that with the Union, which is her ‘sole bargaining agent.’ In short, I conclude that the ‘release’ signed by (her) is of no force and effect."

Reference: Williams Machinery Limited Partnership and International Union of Operating Engineers, Local 115. Robert Pekeles — sole arbitrator. Israel Chafetz for the employer. John MacTavish for the union. April 18, 2013. 11pp.

Latest stories