February 10, 2016
27.4.114
Background
The grievors, who all took various forms of Leave Without Pay (LWOP) from workplaces in Isolated Posts in various regions across Canada, are grieving the Employer's decision to recover their Vacation Travel Assistance (VTA) amounts that were applied for, approved, and paid to them dating back a number of years.
The Department approved VTA payments for employees based on what it later explained to be an incorrect understanding of the application of the VTA when an employee is on LWOP. Once the Employer received clarification from Treasury Board Secretariat (TBS) and researched the implications and responsibilities, a Finance Info bulletin was released indicating that the VTA would be subject to recovery for all periods of LWOP during the fiscal year it was received, and that the recovery would be on a pro-rated basis relative to the number of incomplete months of service during the fiscal year. The grievors were subsequently individually notified of their overpayment amounts, as well as details of the repayment options available. The grievors are contesting the decision to recover these amounts.
Grievance
The employees are grieving the Employer's decision to recover amounts that were paid and approved by management as part of VTA Allowances pursuant to the NJC IPGHD.
Bargaining Agent Presentation
The Bargaining Agent representatives contend that the grievors were not treated within the intent of the IPGHD, and that the decision of the Employer to recover the alleged overpayments is unreasonable.
The Purpose and Scope of the Directive define the intent of the directive, which is to recognize the disadvantages and abnormally higher cost of living that result from working in an isolated post. These provisions do not constitute income/compensation that would pave the way for personal gain. The employees who were affected by these overpayments lived and worked in an isolated post and did not personally gain from the VTA payments that were approved and paid for by the Employer. For all intents and purposes, it is the Bargaining Agent's contention that the affected employees fell within the "Purpose and Scope" of the directive from this perspective. However, the intent of the directive does not include disadvantaging employees by causing and/or creating overpayments because the employer failed to fulfill many obligations and responsibilities under the directive.
TBS has a responsibility to advise, interpret apply and monitor the VTA payments. This, in addition to the Employer's responsibilities, are in place to protect employees from situations of overpayment amounts. The Employer's failure to comply with its responsibilities under the Directive is a significant contributing factor in the creation of these overpayments. Also, had these employees been informed that VTA benefits were practiced and paid differently from the onset of their employment in terms of a disadvantage, this may have impacted their decision to work in the isolated post.
It's apparent that prior to April 2013, the application of VTA was applied very differently; otherwise, the Department would not have issued the finance bulletin for "information purposes". In the Bargaining Agent representatives' opinion, this bulletin was not issued for informational purposes but to support a change in practice. Along with the departmental change in practice came a recovery process that was initiated by the department on orders from TBS. There is no provision in the Directive under Section 3.6 that allows for a recovery process before or after a change in practice occurs. To do so would be unfair, arbitrary, unreasonable, and not within the intent of the Directive.
The grievance in this group that represents an overpayment is a good example of this. Part of this large overpayment was for payments that occurred after the info bulletin was issued by the employer. In this example, it was not until six months later that the employer changed the form to include a pro-rated section while on LWOP. These actions caused an additional and substantial overpayment for the grievor in question.
The Bargaining Agent representatives stressed that it is clear that under Employee Responsibilities, the trigger and right to recover under Section 3.6 exists when an employee fails to disclose a change in circumstance. The only other time a recovery is prescribed is when an employee receives benefits under Section 3.4 and resigns in the same year. In one or both of these circumstances the Employer can initiate a recovery under Section 3.6 for an overpayment relating to VTA. None of the grievors fell under either of these categories.
In addition, another section of the Directive relates to the Employer's requirement for "Communication with Employees". Employees affected by this recovery action cannot recall ever receiving a copy of the Directive from the Employer, and the chances of them having received a package are small. However, if they had received a package, it likely would have been indicated that VTA payments are payable while on LWOP, as this was the Employer's practice at the time. In fact, the Employer's practice was to encourage employees to apply for VTA before going on LWOP.
The Bargaining Agent Representative explained that the authority to recover overpayments to the Crown is established by Section 155 (3) of the FAA. However, while the legislation does grant the employer the authority to recover the overpayment, it does not make it a legislated imperative.
In addition, the Bargaining Agent representative brought forth the concept of estoppel, explaining that it was developed to avoid the unfairness and the unjust nature of enforcing a strict legal right. With the continual acceptance of requests by management over a six-year period, combined with the information provided by the Compensation Advisor, it is clear that the Employer's position at the time was that VTA for employees on LWOP was not to be prorated. Who else were the employees to turn to when enquiring as to their eligibility for such entitlements? When the managers and the Compensation Advisors consistently provide the same approval for benefits, one cannot but infer that employees were intended to rely upon this information.
As the sums to be recovered by the Employer are for amounts of several thousands of dollars, some grievors understandably find themselves in dire financial hardship. Even if employees wave their future VTA entitlements, which is not an option open to everyone, they are still faced with the same financial burden, as the costs for travel remain so prohibitive that it would almost certainly mean that employees would be forced to remain in the isolated area for a significant amount of time in their posting, contrary to the intent and purpose of the IPGHD.
Lastly, regarding discrimination, the Bargaining Agent representative stated that the vast majority of employees in this case affected by the new interpretation of the Directives are men and women on maternity and parental leave. These individuals should not be penalized by a provision that does not take into account their status, as they do not require VTA less than other employees for the simple fact that they have young children.
Departmental Presentation
The Departmental representative argues that the grievors were treated within the intent of the Directive and that the recovery of VTA occurred based on a new understanding of entitlements.
VTA does not form part of the entitlements outlined in subsection 1.14.3 of the IPGHD concerning employees on maternity/parental leave without pay. The Employer therefore deferred to subsection 1.14.1, which indicates that an employee on LWOP is not entitled to the allowances and benefits of the Directive. The grievors' entitlements are therefore to be pro-rated based on the number of months worked in the pertinent fiscal year as calculated in accordance with Section 3.6 which speaks to the circumstances of recovery of VTA.
The Departmental Representative pointed to questions 1 and 2 of the NJC IPGHD, Question and Answers, confirming that VTA is not paid on periods of LWOP or maternity/parental leave.
Also listed were the Directive on Terms and Conditions of Employment, which provides direction to recover an overpayment of salary, wages, pay and allowances from any money due or payable by the Crown to the person to whom the overpayment was made. The TBS Directive on Receivables Management indicates the Chief Financial Officer or other official is responsible for taking collection action, and the TBS Guideline on Collection of Receivables informs Departmental officials responsible for managing receivables of the methods available for collecting and recovering debt due to the Crown. The Financial Administration Act (FAA) at Section 155 gives organizations authority to collect debts to the Crown and 155 (3) relates to overpayment. In addition, the December 16, 2011 TBS bulletin to Heads of Human Resources entitled Recovery of Amounts due to the Crown sets out the timeframe for which recovery can be initiated. Based on the research, the Employer has the discretion to recover monies due to the Crown retroactively up to six years.
The Departmental representative explained that even if the Employer wanted to write off the debts, it does not have the authority to do so. Section 5 of the 1994 SOR/94-602 FAA regarding Debt Write-off Regulations indicates organizations must seek approval from Treasury Board for any debt write-off.
The Departmental representative argued that in order for estoppel to be successful, it would have to be proven that there was express or implied assurance which was clear and precise regarding the employees' right to VTA. It also requires that the assurance led the person to act in some other way than he or she would have acted in other circumstances, which is detrimental reliance. In Murchison v. Treasury Board 2010 PSLRB 93, the adjudicator speaks to recovery of benefits as well as the difference between detrimental reliance and financial hardship. What has not been established here is that had it not been for the assurance that the employees were entitled to the VTA, he or she would not have acted as advised, travelled, and claimed the VTA. Financial hardship is not the same as detrimental reliance which occurs the moment the overpayment took place. The fact of spending the VTA money alone does not establish detrimental reliance.
In terms of discrimination, the Employer maintains that it did not discriminate against employees in any way in relation to this exercise. The Directive specifies that employees are not entitled to VTA during periods of LWOP, which includes maternity or parental leave. Previous NJC decisions confirm that proration of VTA is appropriate, that this does not discriminate against employees on maternity or parental leave and also supports the idea of overpayment recovery (ref. 27.4.99 and 27.4.96).
Based on the preceding, the Employer maintains that the grievor was treated within the intent of the IPGHD. Although payments were received in error, the Employer has an obligation to make attempts to recover the overpayments. If the grievance is upheld, the NJC will be contradicting its own Directive as well as previous rulings it has made on similar cases. The directive is clear that its provisions do not constitute income or other compensation that would open the way for personal gain. To determine that the grievors were not treated within the intent of the Directive and so entitled to keep payments to which they were not entitled to would be in contravention of the Directive.
Executive Committee Decision
The Executive Committee reviewed the report of the Isolated Posts and Government Housing Committee and noted that it could not come to an agreement on the intent of the Directive. The Executive Committee could not reach consensus either. As such, the Committee reached an impasse.