A labour arbitrator has ended a program designed to motivate employees, improve morale and reward continuous improvement because it breaches the collective agreement.
While it’s widely held recognition programs raise employee performance and thus corporate performance, CUPE, the union representing employees at Toronto Hydro, opposed the program because it would “pit members against each other.”
Toronto Hydro launched the program on its own and the union filed a grievance claiming that it was the exclusive bargaining agent for setting the terms of performance appraisal. They also claim the recognition program effectively altered the performance appraisal process and created a new system of monetary payment for employees for which the union had not consented.
Eric Cousineau, an HR consultant with Toronto-based Johnston Smith International, said that often unions will accept recognition programs so long as they are involved with the design of the program.
“What they (Toronto Hydro) should have done right from the start, is do it with the union not to the union,” he said. If the union expressed concerns about the program the best course of action for the employer is to address the concerns. Successful labour-management relationships are built on good communication and creating win-win situations, he said. “If they (the union) are telling you no, go out for a hotdog in an informal way and ask why they are doing that.”
The decision of the arbitrator turned upon the characterization of the rewards being given, said Jason Hanson, a labour and employment lawyer with Osler, Hoskin & Harcourt who represented Toronto Hydro. The organization went ahead with the program because it felt the rewards were not significant enough to contravene the collective agreement.
He also said that while organizations prefer to work with unions and obtain consensus on policies, “management in any organization makes decisions that may give rise to a grievance or a dispute with a union.” In this case, Toronto Hydro’s management felt they could successfully refute the grievance.
The program at Toronto Hydro gave non-monetary awards (up to $300 in value) to employees who demonstrated certain behaviours that reduced costs, improved productivity or otherwise surpassed performance contracts and exceeded expectations.
Toronto Hydro first stated its desire to institute a recognition program in October 1999 and the union soon after expressed specific concerns about the proposed program. The union was invited to develop the program further but refused to participate, continued to oppose the program and told the employer it would file a grievance if the company went ahead. After making some changes to address union concerns, Toronto Hydro went ahead with the program anyway.
In its grievance, the union said that the criteria used in the recognition program were indistinguishable from the criteria applied in performance appraisals. And while the rewards were technically non-monetary, the employees were receiving “something of tangible and material value, akin to a cash payment” in effect “a payment or reward made outside the collective agreement and in breach of the collective agreement.”
Toronto Hydro countered that if the program is deemed to constitute a change to the performance appraisal process, the meetings and correspondence with the union amounted to consultation and therefore they had met obligations under the collective agreement to consult. Further, Toronto Hydro pointed to the Canada Customs and Revenue Agency policy that awards of less than $500 in value need not be declared as income as proof the rewards in the program were not “material or significant.”
In presenting his decision, arbitrator Robert Herman said arbitrators regularly conclude that cash payments from employers are inconsistent with the union’s exclusive right to represent employees and that while none of the rewards in the Toronto Hydro program are in the form of cash, “for purposes of assessing whether the rewards are materially significant to employees, there is little distinction to be drawn between reward in cash or in kind.”
Herman also agreed with the union that the recognition program breached the collective agreement in that it compensates employees for “performance with valuable prizes that in effect mean the chosen employees are being compensated for work at levels greater that described” in the collective agreement. The program amounted to “an entirely new performance appraisal program,” wrote Herman.
Although Toronto Hydro claimed the program was unconnected to the performance appraisal system, Herman also pointed out there was nothing in the program description preventing managers from maintaining records on employees nominated for recognition.
While it’s widely held recognition programs raise employee performance and thus corporate performance, CUPE, the union representing employees at Toronto Hydro, opposed the program because it would “pit members against each other.”
Toronto Hydro launched the program on its own and the union filed a grievance claiming that it was the exclusive bargaining agent for setting the terms of performance appraisal. They also claim the recognition program effectively altered the performance appraisal process and created a new system of monetary payment for employees for which the union had not consented.
Eric Cousineau, an HR consultant with Toronto-based Johnston Smith International, said that often unions will accept recognition programs so long as they are involved with the design of the program.
“What they (Toronto Hydro) should have done right from the start, is do it with the union not to the union,” he said. If the union expressed concerns about the program the best course of action for the employer is to address the concerns. Successful labour-management relationships are built on good communication and creating win-win situations, he said. “If they (the union) are telling you no, go out for a hotdog in an informal way and ask why they are doing that.”
The decision of the arbitrator turned upon the characterization of the rewards being given, said Jason Hanson, a labour and employment lawyer with Osler, Hoskin & Harcourt who represented Toronto Hydro. The organization went ahead with the program because it felt the rewards were not significant enough to contravene the collective agreement.
He also said that while organizations prefer to work with unions and obtain consensus on policies, “management in any organization makes decisions that may give rise to a grievance or a dispute with a union.” In this case, Toronto Hydro’s management felt they could successfully refute the grievance.
The program at Toronto Hydro gave non-monetary awards (up to $300 in value) to employees who demonstrated certain behaviours that reduced costs, improved productivity or otherwise surpassed performance contracts and exceeded expectations.
Toronto Hydro first stated its desire to institute a recognition program in October 1999 and the union soon after expressed specific concerns about the proposed program. The union was invited to develop the program further but refused to participate, continued to oppose the program and told the employer it would file a grievance if the company went ahead. After making some changes to address union concerns, Toronto Hydro went ahead with the program anyway.
In its grievance, the union said that the criteria used in the recognition program were indistinguishable from the criteria applied in performance appraisals. And while the rewards were technically non-monetary, the employees were receiving “something of tangible and material value, akin to a cash payment” in effect “a payment or reward made outside the collective agreement and in breach of the collective agreement.”
Toronto Hydro countered that if the program is deemed to constitute a change to the performance appraisal process, the meetings and correspondence with the union amounted to consultation and therefore they had met obligations under the collective agreement to consult. Further, Toronto Hydro pointed to the Canada Customs and Revenue Agency policy that awards of less than $500 in value need not be declared as income as proof the rewards in the program were not “material or significant.”
In presenting his decision, arbitrator Robert Herman said arbitrators regularly conclude that cash payments from employers are inconsistent with the union’s exclusive right to represent employees and that while none of the rewards in the Toronto Hydro program are in the form of cash, “for purposes of assessing whether the rewards are materially significant to employees, there is little distinction to be drawn between reward in cash or in kind.”
Herman also agreed with the union that the recognition program breached the collective agreement in that it compensates employees for “performance with valuable prizes that in effect mean the chosen employees are being compensated for work at levels greater that described” in the collective agreement. The program amounted to “an entirely new performance appraisal program,” wrote Herman.
Although Toronto Hydro claimed the program was unconnected to the performance appraisal system, Herman also pointed out there was nothing in the program description preventing managers from maintaining records on employees nominated for recognition.
