Arbitrator Davie upheld the Society of Energy Professionals' grievance against Ontario Power Generation ("OPG") to enforce an agreement made by the parties outside of the collective bargaining process until such time as the parties explicitly renegotiated the agreement. The arbitrator rejected OPG's contention that “management rights” could be invoked on a whim to negate a deal that had been willingly entered into by both parties and had been honoured for many years.
The facts were straightforward. Several years ago, as a result of OPG’s desire to improve its relations with the Society, the parties entered into a deal that assured that Project Site Managers (PSMs) at OPG’s Eastern Operations would work 40 pensionable hours per week (as opposed to 35). The agreement began with the words “without prejudice or precedent” and was signed by the Vice President of OPG’s Hydro operations.
Management counsel argued that the agreement was limited to OPG’s specific circumstances at the time that it was entered into, and in any event only applied to PSMs who worked at the time the agreement was struck. OPG argued that the words “without prejudice or precedent” spoke to the agreement’s limited scope.
The Society argued that the words “without prejudice or precedent” were included to limit the agreement's application to OPG's Eastern Operations and as a means of preventing the agreement from creating a province-wide standard. The phrase was not meant to limit the binding nature of the agreement per se. The Society also argued that the collective agreement itself contemplates these kinds of arrangements between the parties, and that management – not the Union – has the burden of showing that agreements of this kind are not enforceable against the employer.
In holding that the agreement was continually enforceable, Arbitrator Davie emphasized, first, that the agreement had no expiry date or time-limiting language and, second, that the agreement was not limited to PSMs who were employed at the time of the agreement.
The arbitrator also accepted that the reason OPG executed the agreement in the first place was to improve relations with the Society, rather than as a response to a changing business climate. If the agreement was meant only to respond to specific business needs at the time, OPG could have unilaterally imposed different work hours for the PSMs without recourse to such an arrangement (through the exercise of its management rights). The fact that the agreement was entered into at all suggested strongly that it was intended to mark a binding agreement between the parties.
The arbitrator also accepted that the words “without prejudice or precedent” were meant to limit the agreement's geographic scope – not its ongoing application.
The case is notable because the burden was placed squarely on management to show that agreements of this kind are not enforceable on a go-forward basis.
A copy of Arbitrator Davie's decision can be found here.
Jeff Andrew was counsel for the Society in the proceeding.