IN THE MATTER OF THE POLICE SERVICES ACT R.S.O. 1990, CHAPTER P. 15 AND IN THE MATTER OF AN'ARBITRATION. Between

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1 OPACAWARD IrE :;\'1~'i1"';;ijj",~,,,,~;;,~,;,,C""'"i,\,.S1!~4,.,';.r:i,..~:~,",(.'J:';'<\;~l' OTTAWA Interest A. AGGAkwAL November 21, 1394 IN THE MATTER OF THE POLICE SERVICES ACT R.S.O. 1990, CHAPTER P. 15 AND IN THE MATTER OF AN'ARBITRATION Between THE OTTAWA POLICE SERVICES BOARD (hereinafter referred to as the "Board") - and THE OTTAWA POLICE SENIOR OFFICERS' ASSOCIATION (hereinafter referred to as the "Association") AND IN THE MATTER OF 1993 COLLECTIVE AGREEMENT ARBITRA TOR: DR. ARJUN P. AGGARWAL APPEARANCES: For the Board John Read Don Lyon - Counsel - Deputy Chief For the Association Richard Lauzon Patrick Moyle - President - Member The hearing in this matter was held on November 4, 1994 in Ottawa, Ontario. OPAC AWARD

2 2 AWARD The undersigned was appointed by the Solicitor General on October 20, 1994, pursuant to section 122 of the Police Services Act, R.S.O. 1990, C.P. 15~ to act as an arbitrator to hear and determine all matters in dispute between the parties relating to the 1993 Collective Agreement. The hearing in this matter was held on November 4, 1994, in Ottawa, ontario. At the outset, the representatives of the parties agreed that the arbitrator had been properly appointed and that the time limits prescribed by the Act for the commencement of the hearing have been complied with. It was also agreed that the issues before this arbitrator are for the Collective Agreement of the year 1993, i.e. from 1st of January to 31st of December INTRODUCTION Prior to 1979, the senior officers of the Force were members of the ottawa Police Association and were covered by the Collective Agreement between the Ottawa Police Services Board and the Ottawa Police Association. In April 1979, the senior officers of the Ottawa Police Force broke away from the Ottawa Police Association and formed their own association called the Ottawa Police Senior Officers' Association. The Senior Officers' Association was

3 3 consequently recognized by the Board pursuant to section 118 of the Police Services Act, for the purposes of the collective bargaining. Thereafter, the Senior Officers' Association bargained separately for the senior officers of the Force and had a separate Collective Agreement. Prior to the Collective Agreement for 1993, the parties have always been able to reach a set~lement without the assistance of an arbitrator. This is the first arbitration between the parties. In 1992, there were 30 members in the Senior Officers' Association as follows: Staff superintendent 1 Superintendent 4 staff Inspectors 10 Inspectors 15 Total 30. In 1992, a committee was appointed by the Chief of Police to conduct a study to find out the ways aridmeans of "flattening" the top of the organization. The committee recommended that the rank of "Staff Inspector" should become redundant through attrition. The Association recognized the fact that the downsizing was necessary in light of hard economic times and accepted the committee's recommendation, even though it may mean down loading the

4 4 responsibilities from the effected ranks and, in some cases, longer hours and increased workload. Consequently, the strength of the Senior Officers' Association has now been reduced to 26 from 30 in The last Collective Agreement between the parties was for one year and that contract expired on December 31st, The Association served the notice to bargain for the 1993 Collective Agreement in November The Association submitted its proposals for the 1993 Collective Agreement in early 1993, as follows: 1. Salaries Article Annual Vacation - Article Plain Clothes Allowance - Article Dry Cleaning - Article Dental Plan - Article Group Life & Long Term Disability Insurance Plan - Article Duration of Agreement - Article Terminal Allowance - Article 8 9. Medical Plan - Article Supplemental Unemployment Benefits (Maternity Leave) - Appendix B. Before any meeting to negotiate the 1993 Collective Agreement could take place, the Social Contract Act was passed by the Government of ontario. Consequently, prior

5 5 to starting negotiations for the 1993 Collective Agreement, the parties decided to discuss and work out a local Social Contract framework pursuant to the Social Contract Act. Therefore, the first meeting between the parties to negotiate the 1993 Collective Agreement took place in December At the first meeting, the Association agreed to withdraw five of its proposals. During the $ubsequent meetings, two proposals were mutually agreed between the parties and two more proposals were withdrawn by the Association. However, the parties failed to reach a full and final settlement for the 1993 Collective Agreement which led to this arbitration. It is not clear whether the parties sought the assistance of a conciliator to iron out their differences. In spite of the parties failure to reach a settlement, the relations between the parties appears to be very cordial, open and respectful, for which I congratulate them. At the hearing before the arbitrator, each of the parties submitted the extensive written briefs which were supported by exhibits and charts. They were then afforded full opportunity to make presentations in support of their respective positions.

6 6 THE ISSUES IN DISPUTE The parties agreed that the following issues still remain unresolved and were before the arbitrator for his determination: Association's Request 1. Group Life and Long Term Disability Insurance Plan Article 23 Article 23 Article 23.01(a) in the existing Collective Agreement reads as follows: The Board agrees to pay 75% of the premium costs to provide life insurance coverage equal to two and a half (2~) times the member's annual salary to a maximum of the City Policy. ~ The Association has requested that article 23.01(a) be amended to provide life insurance coverage for the retirees I up to age 65 and thereafter, in addition to the current provision. Thus, the Union has proposed two new clauses in I addition to the existing provisions in article 23.01(a) as follows: I ARTICLE 23 - GROUP LIFE AND LONG TERM DISABILITY INSURANCE PLAN (a) The board agrees to pay seventy-five I. percent (75%) of the premlum costs to provide life insurance coverage equal to two and a half (2~) times the member'.s annual Isalary to a maximum of the City POlicy.

7 7 (b) The board agrees to provide retired m~mbers under the age of sixty-five (65) with life insurance coverage and premium payments in the amount of two a half (2~) times the member's salary at the time of retirement. (c) The board agrees to provide retired members, upon attaining the age of sixty-five (65), with life insurance coverage on their life in the amount equal to one times the amount of their salary, immediately preceding their retirement until their death. The Association points out that the Board and the Association have agreed in principle for downsizing the strength of the senior officers. However, the members who take an early retirement are left without any life insurance coverage under the existing provisions. Further, it is almost prohibitive for a retired member to buy life insurance at this age due to extremely high costs. Therefore, the demand for life insurance coverage for the retirees has become a major concern for the Association. The Association has suggested that this proposal is so important for it that, to gain this benefit, it has withdrawn seven (7 ) out of ten (10) of its original requests. The Association, in support of its request, has further submitted that the life insurance benefit on retirement until age 65 and thereafter is provided by the Board to the Chief of Police and Deputy Chiefs:

8 8 Effective January 1, 1992, upon retirement Deputy Chi~f will be provided with life insurance coverage on his life equal to the amount of life insurance provided for him immediately preceding his retirement from the date of ret~rement until he reaches age 65 years and theredfter will be provided with life insurance coverage on his life in the amount equal to one times the amount of his annual salary immediately preceding his retirement until his death, all at the entire cost of the ottawa Police Services Board. Further, the City of ottawa has also provided the same benefit to its senior management employees. Article of the Agreement reads:...effective January 1, 1992, any employee who has retired and is in receipt of a pension from the COSF or OMERS, and has a minimum of ten (10) years service with the Corporation shall be entitled, up to age 65, to life insurance at the same coverage and cost sharing formula currently in place. The present rate of life insurance is three times their salary, at time of retirement. One hundred percent (100%) is paid by the Corporation of the City of Ottawa. The Association further points out that senior officers in the following police forces have already provided for this benefit to the senior officers: Gloucester Police Services Board and Senior Officers' Association Agreement provides, in article 18.03, for life insurance to retired members in the amount of two and one half times their salary, at the time of retirement, to a maximum of two hundred and fifty

9 9 thousand dollars ($250,000.00) upon retirement until age 65. At age 64, they will have a five thousand dollar ($5,000.00) life insurance policy until age 70, and a two thousand five hundred dollar ($2,500.00) policy until age 75. One hundred percent (100%) is paid by the Board. stratford Police services Board and senior Officers' Association Agreement provides life insurance to retired members in the amount of two times their salary, at the time of retirement, until age 65. One hundred percent (100%) is paid by the Board. Haldimand-Norfolk Regional Police Services Board and the Senior Officers' Association Agreement provides life insurance to retired members in the amount of one hundred thousand dollars... ($100,000.00) from date of retirement to age 70. One hundred percent (100%) is paid by the Board. sarnia Police Services Board and the Senior Officers' Association Agreement provides life insurance to retired members in the amount of

10 10 one hundred thousand dollars ($100,000.00) until age 65 and a five thousand dollar ($5,000.00) life insurance policy for their spouse. One hundred percent (100%) is paid by the Board. The Association argues that its request for life insurance coverage for the retirees is just and reasonable. It requires "no adjustment in the current monthly premium rates" to continue with the present policy beyond retirement to age 65. Finally, the Association submits that the early retirement of the senior officers of the Force in 1995 would save the Board approximately $297, The total premium for life insurance for the retirees (as proposed by the Association) in 1995 would cost only $4,802.88, resulting to the Board a net savings of approximately $229, The Board, on the other hand, has rejected the Association's 1. proposal on the following grounds: that there are no similar provisions in either Uniform or Civilian agreements with the Ottawa Police Services Board. Neither are there any similar provisions for Uniform or Civilian agreements for the forces of Nepean and Gloucester, (the forces in the immediate area), except for Gloucester Senior Officers 2. that the Association's proposal, if accepted, would be in breach of the Social Contract Act because it

11 11 submitted: potentially provides for an increase in compepsation 3. that in view of the impending regionalization of police services in the ottawa-carleton area (by merging the police forces of ottawa, Nepean and Gloucester, Bill 143), the Board was not prepared to create a precedent which would be out of keeping with either its own Collective Agreement or other collective agreements. In support of its contention, the Board has further social Contract Act The Social Contract Act was passed and deemed to be in force as of June 14, In accordance with the Social Contract Act, a local agreement has been entered into with the Senior Officers' Association. The Social Contract Act provides in part, as follows: Part 10 Miscellaneous. Section 48 (1) No increase in compensation shall be given as a result of any arbitration award or decision made on or after June 14, 1993 (2) for greater certainty, "compensation" in this section includes, a) merit increases; b) cost of living increases or other similar movement of or through ranges; and c) increases resulting from any movements on any pay scale or other grid system. The Social Contract Act also defines compensation in the definition section, as follows: "Compensation" means all payments and benefits paid or provided to or for the benefit of the

12 12 person who performs functions that entitle the person to ~e paid a fixed or ascertainable amount. The proposal of the Association in the Board's view relates to a question of compensation. Al though on the information provided by the Association, there is no immediate cost to this benefit, there inevitably will be. An example of the kind of cost that might be incurred for this proposal is found above with respect to the ottawa Police and Civilian Personnel. It is the Board's position that this proposal undoubtedly would lead to an increased benefit to members of the Senior Officers Association and as such may constitute an increase in compensation in breach of the above noted sections. Regionalization Bill 143, now Chapter 1 Statues of Ontario, 1994, received Royal assent on May 2, It is an Act to amend certain Acts related to the Regional Municipality of Ottawa-Carleton and includes in part, for the dissolution of existing Police Services Boards for the Regional Municipality of Ottawa-Carleton. In Section 32.6(2) it is provided that every person who is a member of a Police force on the City of Ottawa shall, on January 1, 1995, become a member of the Regional Police Force. Inevitably, that will require the amalgamation of the existing Collective Agreements in force. It has been the Board's position that, in the face of that prospective amalgamation,they ought not to be granting provisions to the Senior Officers Association which are not presently in place with its companion Police Forces. DETERMINATION There is no doubt that the benefit of life insurance to retirees is not found in most of the police collective

13 13 agreements. The question, thus, arises whether this alone is a sufficient reason to deny this request. It should be pointed out that the issue of life insurance for the retirees is an emerging one. The need for this benefit has grown in recent years because of the unusual increase in early retirement caused by economic and political pressures to restructure the workforce in order to cut costs. Employers, generally, have responded to this challenge to downsize the workforce by encouraging their senior and highly paid employees to take early retirement instead of massive lay-offs. To achieve this goal, the employers provide various incentives to their employees, including continuation of their fringe benefits after retirement. The continuation of life insurance (fully or partly paid by the employer) is one of the important features of early retirement incentives. In a non-union setting, these benefits are generally outlined either in the employer's early retirement policy or bargained on a one-to-one basis, as a retirement package. Whereas, in the unionized sector, these benefits for the members are usually bargained collectively at the negotiating table. Thus, an increasing trend for early retirement in recent years has escalated the request and granting of fringe benefits, such as life

14 14 insurance to the retirees. At least four of the police forces have provided to their senior officers, the benefit of life insurance on early retirement, ranging from one hundred thousand ($100,000.00) to two hundred and fifty thousand ($250,000.00) and One hundred percent (100%) premiums paid by the Boards. Moreover, it appears that the concept of life insurance benefits for the retirees is not at all new for the ottawa Police Services Board. The Board and the city of ottawa had for some time recognized the importance of this benefit to the employees who elect to take early retirement. In 1992, the Board had graciously granted life insurance coverage, fully paid by the Board, to the Chief of Police and Deputy Chiefs on their early retirements. The City of ottawa had also extended, in 1992, the coverage of life insurance until age 65, fully paid by the City, to its senior management employees who may elect to retire early. Further, I do not. find any merit in the Board's argument that the Association's proposal, if accepted, would establish a precedent and cause problems in the merger of three forces in the Region. This'argument would have some validity, if none of the forces in the Region had

15 15 a similar provision in its contract with the Association. However, the evidence before us reveals that one of the three forces in the Region, Gloucester, has already provided this benefit (fully paid by the ~oard) in the senior officers' collective agreement. Thus in my opinion, the granting of the Association's proposal would neither create a precedent (because a precedent already exists), nor create an additional hurdle in the merger of three forces into a one Regional Force. Finally, the granting of life insurance coverage for the retirees, Contract Act. in my view, does not violate the Social Rather, this benefit fits within the spirit and scheme of social contract legislation which encourages the parties to mutually work out arrangements and develop devices which would ultimately cut costs and save money. Thus, an incentive of life insurance coverage to the retirees is a small price to pay to encourage the officers to take early retirement, which would ultimately lead to substantial savings to the Board. According to the estimates provided by the Association, the Board would have the net savings of $122, for the year 1994, on payment of an insurance premium of only $1,054.06; and in 1995, the net savings of $292, on payment of an insurance premium of only $4, These estimates have

16 16 not been disputed by the Board. Therefore, I find that the Board's fear in this respect is unfounded. At the same time, I find that the Association's request for life insurance coverage for the retirees is fair and reasonable under the circumstances. However, I have some reservations for life insurance coverage after age 65 to the extent requested by the Association. CONCLUSION Thus having regard to the presentations of the parties, taking into account the relevant factors, some of which I have mentioned above, and for the foregoing reasons, I allow the Association's request, in part, and direct that article 23.01(a) be amended to read as follows: (a) (b) (c) The Board agrees to pay one hundred percent (100%) of the premium costs to provide life insurance coverage equal to two and a half (2~) times the member's annual salary to a maximum of the City Policy The Board agrees to provide retired members until the age of 65 with life insurance coverage and 75% premium paid by the Board in the amount of two and one-half times the member's salary at the time of retirement. This will apply only to members who retired after January 1, 1993 The Board agrees to provide retired members, upon attaining the age of sixty-five (65), and until the age of 75, with life insurance coverage and 75% premium paid by the Board in the amount of five thousand ($5,000.00) dollars.

17 17 I believe that I have dealt with the outstanding issues before me. If I have inadvertently failed to make a specific finding on any of the requests presented to me, or should any dispute arise between the parties as to the implementation of this award, I retain the jurisdiction to make any such determinations. I wish to thank the representatives of the parties, particularly Mr. John Read and Mr. Richard Lauzon, for their able presentations and the courtesy and assistance they have extended to me. Dated at Thunder Bay, Ontario, this 21st day of November, if:! ~I~J ~ Arjun P. Aggarwal - Arbitrator )