Labour arbitrator rules against employer in pension calculation dispute with union
July 11, 2023
A labour arbitrator has ruled that excluding employees’ higher pay while on temporary assignment from their base earnings for pension calculation purposes was a breach of the collective agreement.
The Society of United Professionals (“the Union”) launched a grievance against the Ontario Power Generation (OPG) on behalf of six employees who were barred from counting their time on temporary assignments toward their pension benefit calculation. Most of these temporary assignments provided higher earnings than the employees’ usual rate.
According to the decision, OPG’s Pension Plan provides employees with pension benefits calculated on the basis of “base earnings” during the employee’s “best three years” of earnings. Pension contributions by employees and the Employer are also calculated on the basis of employees’ “base earnings”, with employees contributing nine percent of their annual base earnings.
During their time on temporary assignments, the employees were credited for the base earnings they would have made performing their regular duties in their “base” position, but not for earnings paid for the temporary assignment.
The arbitrator concluded that the Union was supported by the relevant language in the collective agreement, finding that the applicable base rate meant the salary that an employee was actually paid for the work they performed, regardless of whether this was done in their regular position or on temporary assignment.
To read the decision, click on more information below:
