IN THE MATTER OF AN INTEREST ARBITRATION INERGI L.P. and. THE SOCIETY OF ENERGY PROFESSIONALS IFPTE, Local 160

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1 IN THE MATTER OF AN INTEREST ARBITRATION BETWEEN INERGI L.P. ( Inergi ) and THE SOCIETY OF ENERGY PROFESSIONALS IFPTE, Local 160 (the Society ) SOLE MEDIATOR-ARBITRATOR: John Stout APPEARANCES: For Inergi: Brett Christen Filion Wakely Thorup Angeletti LLP Peter Watson Director Labour Relations & Human Resources For the Society: Michael Wright Cavalluzzo LLP Mary Donnelly Society Representative Renee Frost Local Vice President Inergi Bargaining Unit HEARING HELD IN TORONTO ONTARIO ON DECEMBER 6, 2017

2 INTRODUCTION [1] I was appointed by the parties as mediator-arbitrator to resolve the issues remaining in dispute between them with respect to a renewal collective agreement. [2] Inergi is a wholly-owned subsidiary of Capgemni. Inergi was established in 2002 as an outsource provider to Hydro One. Inergi provides business process services (such as accounts payable/receivable, accounting services, etc.) and technology services exclusively to Hydro One. [3] The Society represents approximately 8,000 employees of 14 different companies, most of which are in Ontario s electricity sector. Most, but not all, of the companies are successor companies of the former Ontario Hydro. The Society represents professional employees in both public and private electrical energy sector employers, including Ontario Power Generation (OPG), Bruce Power, Hydro One, the Independent Electricity System Operator (IESO), the Electrical Safety Authority (ESA), New Horizons System Solutions (NHSS), Nuclear Safety Solutions (NSS), Nuclear Waste Management Organization (NWMO), Kinectrics, Toronto Hydro, Brookfield Power, the Ontario Energy Board (OEB) and Legal Aid Ontario. [4] The parties collective bargaining relationship has existed since the establishment of Inergi. The relationship is governed by a Voluntary Recognition Agreement (VRA), which is referenced in article 8 of the current collective agreement. The most recent collective agreement was for a term from January 1, 2016 until December 31, [5] The parties have freely agreed to forgo their right to strike and lockout by agreeing to an interest arbitration process to resolve their differences with respect to a renewal collective agreement. The process and my jurisdiction is found in article 15 of the current collective agreement. Article 15 provides as follows: Future contract negotiations disputes shall be resolved by binding arbitration. 2

3 The dispute resolution process shall be mediation-arbitration using the same individual as both mediator and arbitrator. The mediator-arbitrator shall consider the following issues as relevant to the determination of the award on monetary issues: a) A balanced assessment of internal relativities, general economic conditions, external relativities; b) Inergi s need to retain, motivate and recruit qualified staff; c) The cost of changes and their impact on total compensation; d) The financial soundness of Inergi and its ability to pay. A mediator-arbitrator shall have the power to settle or decide such matters as are referred to mediation-arbitration in any way he/she deems fair and reasonable based on the evidence presented by representatives of Inergi or The Society in light of the criteria and items (a) to (d) and his/her decision shall be final and binding. [6] The parties were unable to resolve their outstanding issues and I was asked to arbitrate. As such, the matter immediately proceeded to arbitration. [7] In making my decision, I have carefully considered the parties submissions in light of the agreed upon criteria. I have also applied the well accepted general principle of interest arbitration that an arbitrator s award should replicate the results the parties would have reached had they freely negotiated a collective agreement, see Ontario Power Generation and The Society of Energy Professionals, unreported award dated April 8, 2013 (Albertyn) at page 2. [8] I have also approached the resolution of this matter by attempting to carefully craft an award that takes into consideration a number of trade offs. As such the wage award in the third year (3%) reflects these trade offs. Furthermore, I have also considered the competitive environment in which Inergi operates and what Inergi has expressed as its needs to maintain its contractual relationship with Hydro One. 3

4 AWARD [9] After carefully considering the evidence and submissions of the parties I direct the parties to enter into a collective agreement that contains all terms and conditions contained in the previous collective agreement save and except as modified to incorporate the following: Term of Agreement: Amend Article 9.1 to reflect a new three (3) year term of agreement, commencing January 1, 2018 and concluding December 31, The duration of the Collective Agreement may be extended by mutual agreement of the parties. Should the employer request an extension beyond the initial three (3) year term expiring Dec 31, 2020 the parties will immediately commence negotiations. Any disputes with respect to the extension of the Collective Agreement beyond the initial three (3) year term concluding Dec 31, 2020, including but not limited to, economic increases or any other improvements sought by either party will be referred to Arbitrator John Stout for resolution. Salary Increases as follows: Effective January 1, % Effective January 1, % Effective January 1, % Contractor Provisions For the duration of the term of the Collective Agreement Article 67, LOU #3 and LOU #6 will be suspended and replaced with the following: Inergi will maintain sole authority to make all decisions regarding contracted services provided that: i. A minimum of 25 % of the total workforce will be regular Societyrepresented employees. For greater clarity, total workforce is defined as the total number of persons (including Society, PWU, Managerial employees and all contractors; including but not limited to, Capgemini on/off-shore employees) delivering the services 4

5 defined in all active SOWs (Scope of Work) under the Master Service Agreement ( MSA ) between Inergi and Hydro One. For clarity, total workforce excludes non-direct resources (Shared Services, Corporate Finance, HR and the Account Team and all persons working in Inergi s CSO operations.) For greater clarity, it is understood that those Society represented employees working in one of the excluded functions noted above will be entitled to all rights and benefits in the collective agreement. ii. For the purpose of calculating total number of persons in total workforce and TASEF contributions, Society and PWU will be based on actual headcount, while all others will be calculated on the basis of a 40 hour week. iii. Not later than 15 working days following the conclusion of each quarter in a calendar year Inergi will provide to The Society its calculations of the total workforce in order for the parties to verify the minimum staffing commitment for regular Society employees. In instances where the minimum threshold in paragraph (i) has not been met Inergi must either reduce the number of non-society persons or post and fill the number of vacancies in the Society bargaining unit required to meet the minimum threshold under paragraph (i) within 60 days of the end of the quarter to which the total workforce calculation relates. For clarity, as part of the verification process, Inergi will also provide the Society with the following information: Name of resource and category (i.e. PWU, Society, Managerial, or contractor) Resource I.D. number Project Code Hours worked by each non-represented resource delivering the services defined in all active Inergi SOWs during each quarter iii. For each contractor FTE working within Inergi Society jurisdiction, the Company agrees to contribute, on a monthly basis, the amount of $22.00 per week into the Training and Skills Enhancement Fund ( TASEF ). The TASEF will provide training and enhance relevant skills of Inergi Society Bargaining Unit employees. It will be administered by a committee comprised of a minimum of two management representatives and two Society representatives, one of which must be the Local Vice President. 5

6 iv. During the collective agreement term the Company will pay monthly into the TASEF a prorated amount of not less than one hundred thousand dollars ($100,000) on an annualized basis. Each quarter the parties will true-up and calculate the correct amount owed to the TASEF based on accounting of actual FTE contractors used during each quarter, which shall be performed by an Inergi Controller within 15 working days following each quarter and verified by the parties. Any true-up amount will be accrued in the TASEF fund within 15 working days of the verification of the parties. This may be updated by mutual agreement in the event an improved method is determined to calculate contractor FTE usage. The TASEF Committee shall manage and administer the fund in order to: determine eligibility and the process for accepting applications from the employees; determine the criteria for approving such applications; and monitor the effectiveness of all such training efforts. It is agreed that the TASEF shall only be used for the training and continuing improvement of the skills of the Inergi Bargaining Unit employees in areas that are relevant and appropriate to Inergi s business strategies, and, in particular, will focus upon the enhancement and development of hot skills and also includes Union representative labour training. v. No regular Society employee will be involuntarily laid off as a direct result of contracting out by Inergi. vi. It is agreed that, effective December 31, 2020, any past practice of the employer of offering voluntary severance packages to employees on the basis of seniority shall cease and the employer will thereafter rely upon the strict wording of the Collective Agreement. For clarity, until December 31, 2020, this means that where the employer intends to reduce bargaining unit numbers the employer will first offer the Article 64.8 severance opportunity and continue to accept the senior volunteer(s) in the affected work group specified by the employer for reduction. 6

7 For clarity LOU #10 Related Work Opportunities will continue to apply. INVOLUNTARY LAYOFF PROTECTION FOR ACTIVE SOWs LETTER OF UNDERSTANDING: (a) Except as otherwise set out in part (b) of this Letter of Understanding, Regular Society employees employed by Inergi as of January 1, 2018 will be protected from involuntary layoff under Article 64 by Inergi during the period of June 1, 2018 to December 31, 2020, inclusive, provided they are assigned and working within an active Statement of Work ( SOW ) that falls under the Inergi LP and Hydro One Master Services Agreement ( MSA ). (b) If, at any time, Hydro One exercises its option to terminate an active SOW that falls under the MSA, the following employees will not be protected from involuntary layoff by Inergi LP under Article 64: (i) affected regular Society employees within the terminated SOW; and/or (ii) any Society employee within the Unit of Application who is subject to displacement and/or layoff under Article 64 as a result of the termination of an active SOW that falls under the MSA. For clarity, any involuntary layoffs will be determined through an application of Article 64 including, but not limited to, the Mix and Match process as set out in Article This Letter of Understanding will expire on December 31, 2020, unless renewed by mutual agreement of the parties. Family Day amend Article 40.1 to include Family Day as a statutory holiday. Health Care increase paramedical to $ Career Hall Once The Society s career hall is operational, the parties will meet to discuss the potential inclusion of this additional source of resources within Inergi. Article 64 add new Article to read as follows: Obligations of New Employer Following Transaction Amendment of Term Where the Employer has become bound to this Collective Agreement as a result of a transaction described in Article 64.6, the 7

8 employer shall immediately agree to amend the term of the Collective Agreement to a term of three (3) years commencing upon the date of the transaction, and specifically agrees to file such an application(s) with the Union as may be necessary to amend the term of the Collective Agreement for three (3) years Additional Obligations Where the Employer becomes bound to this Collective Agreement as a result of a transaction described in Article 64.6, the Employer shall, as of the effective date of the transaction: 1. Employ all Society-represented staff employed by the entity Inergi LP, including all such employees on LTD (or other leave of absence). 2. Accept all Society-represented Inergi retirees into a mirror pension plan established by the employer, in accordance with the following: (i) (ii) The employer shall establish a mirror pension plan in which the pension benefits provided by the Employer to Society members under such plan shall be substantially the same as the pension benefits provided to Society represented employees under the existing Inergi pension plan; The Employer agrees to engage in commercially reasonable efforts to enter into an asset/liability transfer agreement with Inergi in respect of the pension plan to be established by the employer and the transferred members. 3. Continue to provide OPEB to retirees in accordance with the Collective Agreement and past practice. 4. Implement a one and one half (1.5%) percent increase to each salary schedules under Article 24 and two additional one and one half (1.5%) percent increases effective upon the commencement of year two and year three of the agreement. 8

9 Surplus Employees Where the Employer has become bound to this Collective Agreement as a result of a transaction described in Article 64.6, the Employer shall not declare an employee surplus for a period of two (2) years from the effective date of the transaction, unless the employee agrees to be declared surplus, in which case the procedure under Article 64 shall be followed by the Employer. Amend Article 5.5 Society Opportunities Outside TSDC to read as follows: a) Inergi will develop a process to provide regular employees with opportunities to participate in Capgemini Canada work assignments outside the TSDC ( engagements ) on a voluntary basis and subject to release by the applicable manager. b) Names and qualifications of interested regular employees will be made available to CGEY resourcing managers for consideration in appropriate engagements. Employees will also have option to apply for opportunities directly through Capgemini Canada s Worldwide Staffing portal and other job search engines. c) Capgemini Canada will negotiate a personal services contract with an employee setting out the mutually agreeable terms and conditions of the engagement. d) When an employee accepts an engagement, he/she: i. Retains his status as an employee of Inergi; ii. Continues to accrue service credits for all purposes under Article 4 iii Will be required to pay Society dues during the term of the engagement. e) In the event that Inergi and Capgemini Canada find temporary work for any Society member(s) outside the bargaining unit, including, but not limited to, any other customer or account outside Hydro One, the parties agree that such work will be considered outside the union jurisdiction. During such assignment outside the bargaining unit these employees will be assigned consistent with the provisions of Article 6 (Employees Temporary Out-of-Province), save and except the parties agree each will have their current base salary pay, as well as access to all benefit, plans, or entitlements under Part X (Health Benefits), Part V 9

10 (ii) (Pension & Insurance). The Society further agrees that it will neither assert jurisdiction claim to such non-bargaining unit work nor attempt to represent any other staff performing work for Capgemini Canada or the client. It is understood that such opportunities may be made available at Capgemini and Inergi s sole discretion for purpose including, but not limited to, training and/or to meet Inergi minimum regular Society employment commitments. f) Upon return from an engagement shall exercise redeployment rights in accordance with Section 6.3. g) Employees on engagements shall be neither advantaged nor disadvantaged with respect to rights under Article 64. Amendments to Relief, Rotation, Vacancy and Transfer/Promotion Provisions Article (v) delete other TSDC applicants Article (i) delete Article (k) amend to read External to Inergi. Article delete final paragraph as follows: Regular MCP applicants are granted the same priority consideration as regular Society-represented applicants at level (f) on condition that Society-represented applicants are granted the same priority consideration as MCP applicants for MCP vacancies except as otherwise provided for in this sub-section. Article delete Letter of Understanding Re: Inergi LP and Society of Energy Professionals ITO Modernization During the parties 2017 collective bargaining negotiations, Inergi LP ( Inergi ) agreed that, if Inergi obtains an agreement with Hydro One to perform the ITO Modernization at an anticipated FTE of 575, Inergi will not, prior to December 31, 2020, involuntary layoff Society bargaining unit members to fewer than 180 members, except as permitted by the Involuntary Layoff Protection for Active SOWs Letter of Understanding. This letter does not form part of the Collective Agreement. However, the parties agree that this Letter of Understanding is subject to, and enforceable, pursuant to Article

11 [10] Unless specifically addressed in this award, all outstanding proposals are dismissed. I remain seized to deal with any errors or omissions and the implementation of this award. Dated at Toronto, Ontario this 18th day of December, John Stout Mediator-Arbitrator 11