Two long-serving unionized employees at Saskatchewan Polytechnic have been awarded severance pay after being reassigned.
The reassignment in April 2021 made them eligible for various contractual options under the collective agreement, including a potentially lucrative severance pay option — about two week’s pay for each year of service.
But the pair were told that, in light of an earlier arbitration ruling involving the post-secondary institution — the Ponak award — collecting severance pay was not an option because they were offered alternative assignments, so they accepted the new positions. That ruling had been upheld by the Court of King’s Bench.
Both of the workers subsequently retired in December 2021.
The case took a turn when, in March 2022, the Court of Appeal reversed the King’s Bench decision and overturned the Ponak award. This reversal led to grievances filed by the two workers through their union, the Saskatchewan Polytechnic Faculty Association (SPFA), claiming entitlement to the severance pay they would have chosen had they known it was an option.
The union’s argument
The union contended that the employees should not be penalized for accepting the reassignments based on an arbitration and court decision that was later overturned.
They argued for the application of the Court of Appeal’s ruling retroactively, allowing the employees to receive the severance pay they would have initially chosen.
The employer’s counterargument
Saskatchewan Polytechnic disagreed, arguing that the grievances were filed too late and that the employees did not express their preference for severance pay at the time of reassignment.
The institution also raised concerns about the financial implications if the severance pay was granted, noting that it would have considered different actions had it anticipated the grievances.
The arbitrator sided with the union, ruling that the grievances were valid and timely. The decision stated that the employees did not relinquish their claim to severance by accepting the reassignments and that the grievances were filed within a reasonable time after the Court of Appeal’s decision.
Even if the claims weren’t timely, the arbitrator said this was a case where it was “appropriate… to exercise discretion to relieve against any time limit breach.”
The arbitrator noted the two workers were explicitly told, correctly at the time, that severance was not an option. But it was also satisfied that the workers would have chosen severance pay had it been available to them at the time.
“Given their length of service and their proximity to retirement, there is no question that receiving a substantial severance payout would have been a highly attractive choice,” the arbitrator said.
“I do not accept the suggestion that because they did not expressly tell the Employer that “I want severance but since it is not available I guess I will take the reassignment”, or words to that effect, that it somehow means that they willingly relinquished their right to severance. In the circumstances, they really had no choice if they wished to continue to earn income.”
The arbitrator noted that, usually, when a law is changed that change is not retroactive — unless the new law itself includes retroactivity.
“In the current case, we are dealing with the reversal of an incorrect contract interpretation – there was no change in either the contract or the law,” the arbitrator said. ” In other words, the Grievors had rights that they were denied at the time they made their decision. The principle of ‘no retroactivity’ does not apply.”
For more information, see Saskatchewan Polytechnic v Saskatchewan Polytechnic Faculty Association, 2023 CanLII 104917 (SK LA)