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March 23, 2010
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March 23, 2010 |
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Issue No. 32 |
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— CONTENT — |
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COLLEGE DISCRIMINATED AGAINST DEANSHIP APPLICANT BASED ON MARITAL STATUS, ARBITRATOR FINDS, BUT REMEDY LIMITED TO DECLARATION A college discriminated on the prohibited basis of marital status against an applicant for the position of dean of the faculty in which he was a department chair when it disqualified his candidacy on the grounds of conflict of interest because his wife was a full-time instructor in the same department, a British Columbia arbitrator has found. Although he determined that the applicant could have been accommodated by administrative arrangements to ensure that he did not have to make decisions as dean that directly affected his wife, the arbitrator did not order the competition reopened or award monetary damages because he concluded that the college had acted in good faith and the candidate who was ultimately chosen had superior qualifications. Details below. UNIVERSITY'S SUSPENSION OF PAYMENTS INTO OVER-FUNDED LONG-TERM DISABILITY PLAN DID NOT BREACH COLLECTIVE AGREEMENT, ARBITRATOR RULES A university's decision to take a contribution holiday with respect to a long-term disability plan for faculty that it operated as a self-insurer and that had built up a huge surplus did not breach a longstanding collective agreement undertaking that "the employer shall continue to pay the premiums" for the plan, a Saskatchewan arbitrator has found. The arbitrator determined that the meaning of "premiums" in the relevant provision was ambiguous and the employer's actual obligations were to maintain the benefits under the plan and to pay into a protected fund enough money to meet anticipated future costs based on actuarial calculations. He found that the university had done both, and the collective agreement provision did not oblige it to make payments to build a surplus greater than was necessary to fund the plan. Details below. |
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— DETAILED REPORTS — |
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COLLEGE DISCRIMINATED AGAINST DEANSHIP APPLICANT BASED ON MARITAL STATUS, ARBITRATOR FINDS, BUT REMEDY LIMITED TO DECLARATION The Facts: Employed since 1995 at Douglas College, a public post-secondary institution with campuses in New Westminster and Coquitlam, B.C., Dr. Peter Wilkins applied in January 2007 for the imminently vacant position of Dean of the Faculty of Language, Literature and the Performing Arts (LLPA). At the time, Wilkins had been Chair of the faculty's English department since 2005, and his wife was a full-time instructor in that department, which she had joined in 1997. As department Chair, Wilkins had no supervisory authority over his wife, because Chairs were members of the bargaining unit and were expected to act as "facilitators," who attempted to achieve consensus among their faculty colleagues. Deans, on the other hand, were managers who were excluded from the bargaining unit. The college's conflict of interest policy stated that "Douglas College shall avoid appointments that result in a College employee supervising another employee with whom he/she has [a] familial relationship. Where a potential conflict of interest does occur due to appointment, promotion or emergent relationships, it must be reported in writing to the responsible administrator and every effort taken to avoid the conflict of interest. This would involve, at a minimum, making alternative arrangements for evaluation, promotion, reappointment and/or discipline." Article 7.7.1of the collective agreement established joint selection committees composed of faculty, who were members of the Douglas College Faculty Association, and members of management, to select senior managers, such as Deans and Vice-Presidents. The role of these committees was ultimately advisory; they would put forward their choice at the end of the process, but the final decision as to whom to appoint rested with the College. At a meeting of the selection committee on January 17, 2007, an issue arose about a potential conflict of interest if Wilkins became Dean of a faculty in which his wife was employed. The chair of the selection committee, Dr. Janis Lindsay, the college's Vice-President of Education, raised the matter at a meeting with the college's president and its associate vice-president of employee relations, and they agreed that it was a serious concern. At a January 22 meeting of the selection committee, Lindsay raised the issue and, according to the minutes, it was agreed, first, that Wilkins would be "temporarily" included in the short list, "pending further review of potential conflict of interest;" second, that if it was decided that his appointment would result in a conflict of interest, he would be removed from the list; and, third, that Wilkins would be "given the opportunity to rectify the conflict of interest situation." It was also noted that Wilkins had not been department Chair long enough to meet the criterion of three years of administrative experience, but his experience on the faculty association executive was treated as the equivalent. At a January 23, 2007 meeting, the college's senior management team consisting of the president and the vice-presidents reviewed the Wilkins issue, discussing the range of a Dean's specific duties such as budget cuts and downsizing, allocation of new resources, timetabling, funding of projects, educational leave, scholarly activity, discipline, and student complaints. They concluded that, in view of the discretionary decision-making powers of the Dean, it would not be possible to accommodate Wilkins in the position because all his decisions would be tainted by his relationship with his wife. Lindsay subsequently advised the selection committee members of the college's position that Wilkins was an ineligible candidate because of his marital status, and informed Wilkins of this. When Wilkins strongly objected that this violated the B.C. Human Rights Code and refused to withdraw from the interview process, Lindsay agreed to allow him to proceed to the first round of interviews. Following these first interviews, at a February 14 meeting to decide which two candidates would proceed to a final interview, Lindsay told the committee that, if it chose Wilkins to go forward, she would have to step in and make the final decision to reject their recommendation. The committee selected two candidates other than Wilkins for the final interview, but two days later one of them withdrew from the competition. At an emergency meeting of the committee, Lindsay insisted that Wilkins, who had ranked third after the first round of interviews, could not be moved up as the second finalist due to the conflict issue. Rather, only the single remaining finalist was to proceed to the second interview. This candidate, who had ranked first after the first round of interviews, was ultimately chosen and appointed Dean. Wilkins grieved the decision, and the union also filed a policy grievance over the same issue. The Arguments: Before the arbitrator, the Faculty Association argued that the college violated the collective agreement because it conducted the selection committee process in an arbitrary, discriminatory and bad faith manner. It submitted that the entire process amounted to bad faith because, even if the selection committee had chosen Wilkins, his candidacy had already been excluded by the employer. It also maintained that the college violated the Human Rights Code, and hence the collective agreement, by excluding Wilkins' candidacy because of his marital status. Insisting that the selected Dean was the superior candidate, the college replied there was no bad faith because it had communicated its position regarding Wilkins' potential conflict of interest openly and frankly at the earliest possible date. The college maintained that it was entitled not to accept any recommendation inconsistent with the conflict of interest policy. As for the alleged discrimination, it said that the Faculty Association had failed to make a prima facie case because it could not show that someone "no better qualified than Dr. Wilkins, but lacking the criteria of marital status" was appointed Dean. In the alternative, it argued that the discrimination was justified as a bona fide occupational requirement and no accommodation was possible because of the very nature of the Dean's duties. The Decision: Arbitrator Stan Lanyon allowed the grievance, but denied any remedy. Although he declared that the college had breached the Human Rights Code and the collective agreement when it discriminated against Wilkins based on his marital status, he held that the College had ultimate discretion to appoint anyone it wanted regardless of the selection committee's recommendation and that the appointment had resulted from a good faith balancing of interests and was not "a case of historical stereotyping and marginalization." With respect to the allegation of bad faith, Arbitrator Lanyon considered that "it was a reasonable exercise of Dr. Lindsay's role as Chair of the Committee to investigate the potential conflict of interest, and confer with the Senior Management Team of the College…. Further, the Committee was obligated to ensure that all the College policies were considered in the selection of candidates. The Senior Management Team of the College is especially entrusted to ensure that no employee is placed in a position where they would be in a conflict of interest. Dr. Lindsay made clear the Senior Management's decision at the first opportunity. She was frank and forthright in informing the Committee of the reasons for the College's determination that Dr. Wilkins was ineligible under the Conflict of Interest policy." Lanyon determined that "[t]he [Faculty Association] took a different view ... of Dr. Wilkins' potential conflict of interest. Both sides, I conclude, held their views in good faith.... [H]owever, there were legitimate differences with regard to how the policy worked.... [N]either the conduct of the College, nor the conduct of the DCFA members, amounted to bad faith, or arbitrariness, simply because their views differed as to whether or not Dr. Wilkins was in conflict of interest, and if so, whether he could be accommodated." The arbitrator held that "[t]he College ... had the discretion to accept or reject the recommendation of the Selection Committee. In this case the Selection Committee had clearly made a decision to go with someone who has more administrative experience than Dr. Wilkins, and continually scored higher than Dr. Wilkins throughout the process. I therefore conclude that [the appointed Dean], on the merits, was the superior candidate, and the College's hiring of him, properly fell within its management rights." Turning, however, to the policy grievance as to whether the College's application of its anti-nepotism policy violated the Human Rights Code and the collective agreement, Lanyon found that prima facie discrimination based on marital status was established, and that the impairment was not minimal, as "the burden placed upon Dr. Wilkins ... was that he would be forever precluded from occupying the Dean ... position ... as long as he remained married to an instructor in the English Department. Other potential and significant burdens were the potential transfer of his wife from her position; or that his spouse had to resign from her position, or that one, or both of them had to move to another educational institution." He held, however, that "[t]he objective of Douglas College's anti-nepotism policy is to prevent supervisory relationships from developing between family members ... and is rationally connected to employment at the College.... [I]t is reasonably necessary to prevent real or potential conflicts of interest or abuses of power. Therefore, this specific aspect of the policy does not contravene the Human Rights Code and is justified as a bona fide occupational requirement." Nevertheless, Lanyon rejected the College's "position that no accommodation of any kind was possible," finding that various administrative solutions were possible to ensure that Wilkins as Dean would not have had to make any decisions directly affecting his wife and that such matters could have been handled by someone else. He concluded that "[w]hat, therefore, is ultimately at issue, is the reasonableness of the accommodations that all parties are required to make; in effect the balancing of interests.... [A] conflict of interest policy that is 'uncompromisingly stringent', or 'disproportionately stringent', does not survive a human rights analysis...; such a policy must take into account the 'actual degree of likelihood that an abuse of power will take place.' ... [T]he policy must, if it is to be justified under human rights legislation, accommodate individuals who fall under an enumerated ground and are adversely affected." He concluded that "the College must balance its Conflict of Interest Policy with the Human Rights Code and ... any candidate for the position of Dean should not be disadvantaged based on their marital status." In the result, Arbitrator Lanyon issued a declaration that "the College has violated ... the collective agreement, and Section 13 of the Human Rights Code, when it disqualified Dr. Wilkins from the Dean, LLPA position, based on his marital status." However, he declined to award any remedies with regard to reopening the competition or granting Wilkins any monetary compensation. He reasoned that this was not a case where Wilkins had been passed over on discriminatory grounds despite being better or equally qualified for the position, that Lindsay had full authority to appoint the candidate of her choice as Dean regardless of whom the committee might have recommended, provided that she acted in good faith, and that "this case does not fall within the historical forms of discrimination, most of which are meant to demean and harm members of vulnerable groups." Rather, it involved a difficult balancing of competing interests. Comment: Central to the outcome of this case was the arbitrator's determination that the evidence did not establish that the grievor was the best qualified candidate for the position or even as qualified for the position as the successful candidate. This meant that, although there had been unlawful discrimination on the basis of marital status, it did not follow that this discrimination had actually deprived the grievor of a position that would otherwise likely have been his. As a result, no remedy was necessary beyond a declaration. As the arbitrator observed, "the [Faculty Association's] policy grievance, and in part, Dr. Wilkins' individual grievance, [are] about the future – would candidates necessarily be excluded from the position of Dean at Douglas College based on their marital status[?] As much as anything else, and indeed perhaps more so, it is this principle that Dr. Wilkins and the DCFA [have] sought to establish; that is, [that] the blanket application of an anti-nepotism policy does not survive, either on its own terms, or under a human rights analysis." Case Name: Douglas College Faculty Association v. Douglas College |
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UNIVERSITY'S SUSPENSION OF PAYMENTS INTO OVER-FUNDED LONG-TERM DISABILITY PLAN DID NOT BREACH COLLECTIVE AGREEMENT, ARBITRATOR RULES The Facts: Even before the University of Saskatchewan Faculty Association was certified as bargaining agent for faculty at the University of Saskatchewan and the parties negotiated their first collective agreement in 1978, faculty members at the university were covered by a salary continuance or long-term disability plan. While initially the university paid half the cost of the premium and each faculty member paid the other half through premium deduction, in 1975 the university assumed the full cost of the plan. The first collective agreement, in 1978, provided in Article 23.4 that "[t]he Salary Continuation Plan in effect for the 1976-77 academic year shall remain in effect until modified in whole or part by negotiation between the employer and the Association. The employer shall continue to pay the premiums for this plan." That language remained unchanged since then, although it appeared as Article 22.5 in more recent agreements. In 1987, the university decided to cease using a third party insurer, and instead set arrangements in place to become a self-insurer for the same "plan." In 1991, the university executed a Trust Agreement, said to be effective as of April 1, 1987, whereby four of the five trustees were (and remained) the university's senior financial administrators while the fifth was a faculty member nominated by the Board of Governors. Section 1(a) of this agreement stated that "[t]he University hereby establishes with the Trustees a trust fund (the 'Trust Fund') consisting of the assets and the earnings and profits thereon, accumulated by the University for the purpose of meeting its obligation to provide long term disability benefits to the classes or categories of employees listed in Appendix I, as shall from time to time be paid or delivered or caused to be paid or delivered to or for the Trustees. All such assets and investment earnings, and proceeds thereof, after deduction of authorized expenses therefrom, shall constitute the Trust Fund. The Trust Fund shall be held by or for the Trustees in trust and be dealt with in accordance with the purposes and provisions of the Plan and this Agreement." Section 5 provided that "[t]he Trustees, giving due consideration to the amounts held in the Trust Fund and the benefits provided under the Plan, shall determine the adequacy of the funding of the benefits provided under the Plan and shall report and make recommendations to the University with respect to funding, for the purpose of ensuring that the Plan is adequately funded." In 2000, the university and the Faculty Association negotiated some major changes to the pension arrangements available to faculty members. Since by then the long-term disability plan had a very large surplus, it was decided to make the payments into the pension plan, for members off work and receiving long-term disability payments under the plan, from the disability insurance plan surplus. In a memorandum of agreement to that effect between the parties, which referred to the pension plan contributions on behalf of members on disability as Extended Benefits, s.2 included a statement that "[t]o the extent possible, the Extended Benefits will be provided from employer owned reserves established by the employer in the Salary Continuance Plan's asset fund to provide for regular benefits from the Salary Continuance Plan in the future. At the point, as determined by the Salary Continuance Plan's Actuary, the Salary Continuance Plan is considered to have sufficient assets to support all future benefits expected to be paid under the Salary Continuance Plan without further premiums from the employer there may be negotiations concerning the redirection of Salary Continuance Plan premiums being contributed by the employer." On June 19, 2007, the university's director of benefits and pensions sent to the members of the long-term disability plan a memorandum entitled "Self Insured Long Term Disability Plan Premium Holiday" in which he advised them that, "[a]s a result of very good claims experience since inception of the LTD Plan and consistent good long term rates of return under the Trust Fund, the Health and Welfare Trust Fund is now in a significant surplus position. The University has therefore decided that a 'premium holiday' be taken from the Health and Welfare Trust Fund effective May 1, 2007 and that the funding requirements be reviewed after a five (5) year period. The premium holiday will not affect your coverage under the Plan and you will continue to be fully covered under the terms of the Plan." The Faculty Association filed a grievance referring to Article 22.5 of the collective agreement which obliges the employer to "continue to pay the premiums for this Plan" and asserting that "the employer cannot unilaterally change the terms of the collective agreement and is under an obligation to negotiate with the Association any changes to the collective agreement." The Arguments: Before the arbitrator, the Faculty Association argued that the university's funding obligation for the LTD plan was a bargained benefit currently set out in Article 22.5 of the collective agreement. It submitted that, even if there were an actuarial justification for taking a "premium holiday," nothing in the plan nor in the collective agreement specifically contemplated or allowed the university to do this. An obligation to bargain arose, the union maintained, because the employer's actions constituted a complete derogation from the language of the collective agreement: while the collective agreement expressly required the employer to "continue to pay the premiums for this Plan," its unilateral action in discontinuing the payment of premiums meant by definition that it was not continuing to pay those premiums. The university replied that historically the use of the term "premiums" could be seen as a carryover from the days when an insurance company provided the plan. In its submission, the clause at issue was clearly not intended to commit the university to the payment of any fixed amount, but only to keeping the plan properly funded. It argued that what the Faculty Association was actually asserting, without any justification, was an entitlement, or at least a legal right, to bargain over the savings the University achieved by taking a contribution holiday. The Decision: Finding that "there is nothing, in law or equity, to prevent the University continuing to 'pay' the premiums required by the collective agreement obligation, by drawing down on the surplus within the trust funds it has unilaterally established and accumulated," Arbitrator Andrew Sims dismissed the grievance. Arbitrator Sims found that the disputed phrase in Article 22.5 was ambiguous, but that its most probable meaning, after the change to a self-insured plan, was that "regardless of what the trust agreements may provide, premiums under the collective agreement means the amount necessary to fund, in the same way as an insurer would have to fund, current benefits plus a reserve for future anticipated liabilities, plus administrative costs and so on. Such a definition might incorporate actuarial practice as the measure of the sufficiency of any such payments and reserves." Sims held that "[m]y interpretation of the obligation 'to continue to pay the premium' is that the University is committing to fund the LTD plan in an analogous manner to a fully insured although experience rated plan." The arbitrator found confirmation for this view in the observation that "[i]nternally, the University, its actuaries, and the trustees have used the term 'premiums' as if they were an amount related to the actual ongoing costs of the plan. Indeed, in describing a 10 year contribution holiday, the actuaries do not show the elimination of premiums, they show annual figures for ongoing plan costs or 'premiums', set off against the plan's surplus. It is quite conceivable that parties would attribute a similar meaning to 'pay the premiums' in their collective agreement and I find that is indeed what they intended." Arbitrator Sims concluded that "the University, even under its 'contribution holiday' is still 'paying the premiums' required of it for so long as it is able to draw down on truly surplus funds in the Health and Welfare trust alone, or as supplemented by transfers from the University trust. That would cease to be so at any point where the plan's surplus fell below that actuarially and reasonably necessary for the plan to be solvent. At that point, there would be nothing left in surplus to 'pay' from, and direct funding would have to resume." Comment: The arbitrator in this case took a purposive approach to the interpretation of the disputed collective agreement provision. He focused on considering what the parties were trying to achieve not only when they originally negotiated the university's undertaking to "continue to pay the premiums" but also what their purpose would have been in deciding to keep this clause in successive collective agreements long after the university had become the self-insurer of the plan and there were no premiums, as such, to pay. He determined, in effect, that the assurances that the faculty wanted and the employer granted, were, first, that the university and not the employees would make all the payments for this benefit, and, second, that the plan would always be sufficiently funded by the employer to meet present and future needs. As both aspects of this undertaking were fully met at the time the grievance was adjudicated, the arbitrator could identify no breach by the university. Case Name: University of Saskatchewan Faculty Association v. University of Saskatchewan |
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