-and- IN THE MATTER OF AN INTEREST ARBITRATION BETWEEN: ORCHARD TERRACE CARE CENTRE CANADIAN UNION OF PUBLIC EMPLOYEES LOCAL

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1 IN THE MATTER OF AN INTEREST ARBITRATION BETWEEN: ORCHARD TERRACE CARE CENTRE -and- CANADIAN UNION OF PUBLIC EMPLOYEES LOCAL BOARD OF ARBITRATION: JANE H. DEVLIN IRV KLEINER MENNO VORSTER CHAIR EMPLOYER NOMINEE UNION NOMINEE PATRICIA G. BALFOUR, FOR THE EMPLOYER ANDREW WARD, FOR THE UNION

2 1 Orchard Terrace Care Centre is a 45-bed for-profit Nursing Home located in Stoney Creek, which also has 38 retirement suites. The Union has represented service employees at the Home for many years and there are currently approximately 70 members of the bargaining unit. Rykka Care Centres LP purchased the Home from Ernst & Young, the Receiver and Trustee in Bankruptcy, on December 31, 2010 together with six other Homes, all of which were previously owned by the Royal Crest Lifecare Group. One of those Homes was Wellington Park Care Centre. As a result of an agreement reached with the Receiver in 2005, improvements in wages and benefits for service employees at the Homes formerly owned by the Royal Crest Lifecare Group were tied to the terms of the collective agreement between Extendicare Sudbury York Nursing Home and CUPE. Prior to Rykka's purchase of Orchard Terrace, the parties operated under a workplace practice document, which expired on December 31,2010. During bargaining, the parties agreed on a number of items but could not agree on the term of the collective agreement. Accordingly, pursuant to the provisions of the Hospital Labour Disputes Arbitration Act, the collective agreement covered by the Board's award shall extend from January 1, 2011 to December 31, The agreement shall consist of the unamended portions of the workplace practice document, the items agreed to between the parties and the Board's award on the issues in dispute. Before turning to the issues in dispute, we note that it was the Employer's submission that Wellington Park Care Centre is the most appropriate comparator for purposes of this case. In this regard, the Employer referred to a recent award of a

3 2 Board chaired by Arbitrator Stanley in Wellington Park Care Centre and Canadian Union of Public Employees, Locai (March 31, 2014 (unreported)). The Employer contended that there are a number of similarities between the two cases. In particular, the Employer noted that Rykka owns both Orchard Terrace and Wellington Park and that service employees at both Homes are represented by the same CUPE Local. The Employer also noted that Orchard Terrace and Wellington Park are the only two Homes owned by Rykka where service employees are represented by CUPE. The Employer noted, as well, that the term of the collective agreement before this Board is identical to the term of the agreement before the Stanley Board. Moreover, the Employer noted that as of December 31,2010, the maximum wage rates for a number of classifications were identical and there were also similarities in a number of benefits and in superior benefits enjoyed by employees at the two Homes. The Employer also advised that the Homes are located approximately 20 kilometres apart and noted that they share a common history as both Homes were previously owned by the Royal Crest Lifecare Group. The Union disputed the Employer's submission that Wellington Park is the most appropriate comparator for purposes of this case and referred to an award of a Board chaired by Arbitrator Shime in Strathaven Lifecare Centre and Canadian Union of Public Employees, Local (December 27, 2013 (unreported)). That award also dealt with a Home that was formerly owned by the Royal Crest Lifecare Group and the Union noted that the term of the collective agreement before this Board is identical to the term of the agreement before the Shime Board. The Union also noted that the Strathaven award was issued prior to the award in Wellington Park. The Union further submitted that rather than considering a single comparator, the Board ought to consider

4 3 awards and settlements involving other for-profit nursing homes with retirement suites located in southwestern Ontario where service employees are represented by CUPE. In the circumstances, the Union submitted that it would also be appropriate to consider the terms of the collective agreement between Extendicare Sudbury York Nursing Home and CUPE. Having carefully considered the submissions of the parties, we are not persuaded that the outcome in this case should be based on a single comparator. While service employees at Wellington Park are represented by CUPE, the same is true of service employees at Strathaven. In the awards dealing with those Homes, the term of the collective agreement was identical to the term of the agreement in this case and, as the Union noted, the Strathaven award was issued prior to the award in Wellington Park. The Chair of this Board has also rendered a number of awards involving collective agreements with the same or similar terms. Moreover, while the maximum wage rates for some classifications at Orchard Terrace were the same as those at Wellington Park as of December 31,2010, as the Employer acknowledged, there were some differences in the compensation and benefit provisions of the two agreements. Further, there is no indication that in the past, the parties in this case looked to Wellington Park as the only comparator. Orchard Park is one of a number of Homes that were previously owned by the Royal Crest Lifecare Group and beginning in 2005, wage and benefit improvements for service employees were tied to the terms of the collective agreement between Extendicare Sudbury York Nursing Home and CUPE.

5 4 In the result, having regard to the submissions of the parties and the provisions of the Hospital Labour Disputes Arbitration Act, the Board's award on the issues in dispute is as follows: 1. Article Seniority This Article provides for seniority accumulation for all employees based on date of hire and there is no proposal to amend that provision. With respect to service accumulation, the Employer proposed that a distinction be drawn between full-time employees and part-time employees and that for the latter group, service accumulation be based on hours paid. Having considered the submissions of the parties, the collective agreement shall provide that for part-time employees hired to work in the Nursing Home after the date of the award, 1950 hours paid shall be equivalent to one year of service for purposes of progression on the wage grid. For all part-time employees hired after the date of the award, 1800 hours paid shall be equivalent to one year of service for purposes of vacation entitlement. The collective agreement shall also include an Article providing credit for service for employees covered by these formulas who change their status from full-time to part-time or vice versa.

6 2. Article 18 - Leave of Absence - Pregnancy and Parental Leave 5 Effective 30 days from the date of the Board's award, SEB top-up shall be provided for pregnancy leave only to a maximum of 75% of regular weekly earnings for a period of 15 weeks. The usual language shall be included in the collective agreement. 3. Article 21 -Effect of Absence The Board awards the language proposed by the Employer in Article 21.07(iv) and the balance of the language in Article that has been agreed to between the parties. 4. Article 31 -Vacations Effective the next vacation year, vacation entitlement shall be expressed in weeks, rather than working days, as proposed by the Employer. As noted above, part-time employees hired after the date of the award shall earn vacation credits on the basis that 1800 hours paid is equivalent to one year of service. 5. Article 34 - Health and Welfare Effective 30 days from the date of the Board's award, vision care coverage shall be increased by $20.00.

7 6 Effective 30 days from the date of the Board's award, reference to semiprivate hospital coverage shall be deleted from the collective agreement. There will be no other changes to the provisions of this Article 6. Article 36- General Provisions With regard to Education Leave and In-Service, the Board understands that although a CPR certification session was offered to employees of the Retirement Home this year, it was not paid for by the Employer. The Board also understands that the Employer has not paid for such courses for Retirement Home employees in the past. Accordingly, the Board awards the following language which was proposed by the Employer: (d) It is understood that the Employer's payment obligations under this Article do not apply to the Retirement Home employment requirement that the employee must possess and maintain a current CPR certificate. The Employer is not obliged to pay for the costs of the CPR course or for the time spent by the employee in certifying or annually re-certifying in CPR. premium are denied. The proposals of both parties to amend the provisions dealing with shift 7. Article 38- Term of Agreement As noted previously, the collective agreement shall extend from January 1, 2011 to December31, 2012.

8 7 As Article of the workplace practice document makes provision for retroactivity, there is no need for an award on this issue. 8. Schedule "A" - Wages The Board awards the following general wage increases: Effective January 1, % Effective January 1, % Given that wage grids are commonly found in nursing home collective agreements, the Employer's proposal to establish a wage grid for the Nursing Home classifications is granted. The grid shall consist of a probationary rate, a start rate, a one year rate and a two year rate. The latter rate, being the maximum step on the grid, shall reflect the rate for each Nursing Home classification contained in the collective agreement. The grid shall apply to employees hired to work in the Nursing Home after the date of the Board's award and we remit the appropriate differentials to be applied to the lower steps of the grid to the parties and remain seized in the event that they are unable to come to an agreement.

9 8 The Board shall remain seized pending execution of a collective agreement between the parties. DATED AT TORONTO, this 19th day of November, ~H~\... Chair See Dissent Attached Employer Nominee See Partial Dissent Attached Union Nominee

10 Dissent of Employer Nominee The issues in dispute in this case were primarily monetary with the wage issue being the most contentious. The Employer proposed a two year wage freeze which was in turn based upon the wage freeze pattern that emerged from the SEIU master award of Arbitrator Teplitsky. We heard that the Teplitsky Award applied to Ryka SEIU represented employees in five of its facilities. The wage freezes for the employees in those Homes commenced in the 2012 year. The Employer also submitted evidence to the Board which indicated that the Teplitsky Master Award has not only impacted arbitral and negotiated outcomes for collective agreement terms that commence in late 2012, but also contract years that commence in the early part of2012. The Stanley Award for the Ryka Wellington Park Care Centre agreement is just one of several awards that have been issued by a number of arbitrators which provide for a wage freeze for a contract year commencing in the early part of2012. In the Wellington Award, Arbitrator Stanley awarded a 2% increase for 2011 and a wage freeze with a lump sum payment for He also awarded two other compensation improvements and several Employer proposed cost containment proposals which I will refer to below. I would take issue with the Chairperson's decision to award an increase of 1.5% in the second year of the term of this Agreement. The Employer relied upon the Stanley Award together with a myriad of other interest arbitration awards of other Chairpersons which supported its wage freeze position. Regardless, the Stanley A ward ought to have been afforded considerable weight by this Chairperson given the common ownership of the two facilities, and, the fact that both facilities are CUPE organized facilities, and, that the two facilities have similar terms and conditions of employment, and, that the two facilities are in close geographic proximity to one another. Wellington Park is approximately 20 kilometers away from Orchard Terrace. Both facilities are also in the same LHIN catchment area. I would also observe that Orchard Terrace is a much smaller facility than the Wellington facility that Arbitrator Stanley was dealing with. Orchard Terrace has only 45 beds while the Wellington facility has 132 beds. As such, the Orchard Terrace Facility cannot benefit from the same cost efficiencies as its counterpart. As such, it does not make sense to award terms which create greater labour costs. We heard that almost all of the nursing home service awards for terms extending beyond 2012 that have been renewed since the Teplitsky Award have adopted the wage freeze pattern. An overwhelming number of Arbitrators have followed the SEIU Master Award of Mr. Teplitsky. In addition, there have been many voluntary settlements which have also followed the SEIU Master Award. The Employer's written submission also affirmed that the Teplitsky Award has also had " a material impact on awards and settlements for contract years commencing as early as January 2012". The outcomes that follow Mr. Teplitsky's Award account for approximately 228 Homes.

11 Awards which included wage freezes have been issued by twenty different arbitrators (not including Mr. Teplitsky). The wage freeze arbitration outcomes affect thirteen different trade unions. What is also particularly relevant is the fact that the SEIU Master wage freeze Award has triggered a material change in the earlier established trends for contract years commencing as early as January of The Employer advised that several arbitrators have now issued wage freeze awards for contract years commencing as early as January of2012 and that most ofthese same arbitrators (prior to the Teplitsky Award) had issued awards with wage increases for contract years commencing in early The Teplitsky Award changed the landscape. The Employer referred us to a number of A wards which provided for a wage freeze for contract years commencing earlier than the SEIU Master September 2012 effective date, and as early as January of We were referred to Awards of Arbitrators Kaplan, Luborsky, Albertyn, Bendel, Lee, Stanley, Starkman, Jesin, Joliffe, and Sheehan all of whom published awards with wage freezes earlier in The Employer also referred this Board to voluntary settlements that included wage freezes in respect of a period that also commenced in early While it is true that the Employer in this case placed considerable emphasis upon Arbitrator Stanley's Award in the Wellington Park and CUPE case, they also relied heavily upon the significant number of awards and settlements that supported its wage freeze position as indicated above. In my respectful view, Arbitrator Devlin ought to have followed the Stanley Award in the circumstances presented in this case. That Facility is a compelling and highly relevant comparator. I would maintain that by departing from that Award, the labour relations landscape within this organization will be confused. I would also observe that it is this very kind of phenomena (ie. inconsistent arbitration outcomes for the same term with the same union within the same employer organization) that encourages parties to arbitrate (and not negotiate) with the belief that "they can do better" by utilizing the arbitration process. Critics of interest arbitration have suggested that the interest arbitration process creates a narcotic effect within this sector of the labour relations community and that it discourages meaningful bargaining and encourages parties to adopt and propose unreasonable demands during the collective bargaining process. I believe that that an award such as this one will indeed be disruptive to the labour relations within this organization and that it will indeed discourage reasonable and hard bargaining. If replication is indeed the objective of the interest arbitration process, there is little doubt in my mind that this Employer would not have agreed to a wage increase in the second year of the term of this Agreement where the economic sanctions of strike and lockout could have been accessed. I make this observation while having due regard to the myriad of awards and settlements that were put before the Stanley Board and before this Board which clearly support at least one year of wage freeze during the term. It is also difficult to imagine that this Employer would have agreed to depart from an arbitrated outcome that preceded this Award and which included a wage freeze. It almost goes without saying that there must surely be an expectation, that in the next collective agreement term, these parties will be subject to two years of wage freezes. There is no doubt that the industry norm is for bargaining units in the long term care sector to have two years of wage freezes. That is what I would therefore expect to occur for 2013 and I simply maintain that

12 the first year of that freeze ought to have occurred in the second year of the subject term for the reasons indicated above. With respect to the balance of the A ward, I would have been inclined to at least award the Employer's cost containments with respect to the introduction of the drug dispensing fee cap, and the introduction of a one year lag in the Dental ODA fee schedule. These containments were also awarded by Arbitrator Stanley in the Wellington Park Care Centre CUPE agreement. They are sensible containments and produce modest savings which at least mitigate to some extent, the superior compensation provisions that the employees in this Facility enjoy. Dated this 18th day ofnovember, "Irv Kleiner", Employer Nominee

13 1 Partial Dissent by Union Nominee Menno Vorster Canadian Union of Public Employees, Local1712-0l and Orchard Terrace Care Centre H.L.D.A.A. Interest Arbitration I dissent in part from this Award. This arbitration is the first since this home came out of receivership. Considering that fact, the Award is modest by any standard and I submit that some of the changes sought by the Union should not have been denied. The most noteworthy aspect of this process is, however, that all of the employer's collective agreement claw-backs have been rejected. Some of the most sweeping changes suggested by the employer were in the area of benefits. Management proposed to reduce the portion of the dental plan premium paid by the employer from 75% to 50%. In addition the employer wanted dental procedures paid on the basis of the previous year's Ontario Dental Association rates rather than those of the current year as is presently the case, leaving the employee to pay the difference. Both of those changes were denied. Further, the employer sought a dispensing fee cap of $7.50 for all prescription drugs and it too was dismissed. The current shift premium is $.35 per hour for all hours worked during the evening and night shifts. The employer sought to change this amount by reducing the quantum by five cents an hour. This decrease seemed rather minor considering the additional employer proposal to pay the premium only to employees who rotate shifts. Since all employees work fixed shifts, shift premium payments made conditional on rotation are worth nothing at all. Although the

14 2 Award denied the Union's request to increase the shift premium by five cents per hour, it dismissed the dismantling of the shift premium provision altogether as wanted by the employer. Respectfully submitted, Menno Vorster