1 In the Matter of an Arbitration Between University of New Brunswick [Employer] And Association of University of New Brunswick Teachers [Association] And In the Matter of an Interest Arbitration for Full-Time Faculty Before: M. Brian Keller, arbitrator Richard Petrie, employer nominee Joël Michaud, Association nominee. Appearances: David Coleman, Dan Coleman, Barbara Richards, Moira Goodfellow, Ann Sherman, Laurelle LeVert, Ryan Johnston, for the Employer Miriam Jones, Lloyd Waugh, Francesca Holyoke, Jeff Houlahan, Charlene Mayes, Melanie Wiber, Robert Gagne, Glen Leonard, Vlad Tasic, for the Association Hearing in Fredericton, July 6, 2014
Transcript
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In the Matter of an Arbitration
Between
University of New Brunswick [Employer]
And
Association of University of New Brunswick Teachers [Association]
And
In the Matter of an Interest Arbitration for Full-Time Faculty
Before: M. Brian Keller, arbitrator
Richard Petrie, employer nominee
Joël Michaud, Association nominee.
Appearances: David Coleman, Dan Coleman, Barbara Richards, Moira Goodfellow, Ann Sherman,
Wiber, Robert Gagne, Glen Leonard, Vlad Tasic, for the Association
Hearing in Fredericton, July 6, 2014
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Award
The University of New Brunswick is one of the oldest public universities in North America. It is, in fact,
the oldest English-language University in Canada. It was initially established in Fredericton in 1785 and
the Saint John campus was established in 1964. It consists of 14 faculties and offers more than 75
undergraduate and graduate programs. The University serves approximately 11,000 undergraduate and
graduate students and employees over 3000 full and part-time staff, including academic staff, support
staff and students.
The Association was founded in October 1956. It initially represented only professors, but subsequently,
librarians, as well as instructors were added. It was granted certification as a bargaining agent in March
1979. The Association represents approximately 575 full-time academics.
The Association served notice to bargain in April 2013 for the collective agreement which was to expire
June 30, 2013. The parties were not successful in resolving their differences and, consequently, a
provincially appointed conciliator met with the parties approximately 12 times. A “no board” decision
was released on November 20, 2013. In December 2013, the Association held a strike vote and received
a 90% strike mandate. The Association commenced its strike on January 13, 2014, and was locked out
the next day.
A special outside mediator was appointed by the government who, with the assistance of a Provincial
mediator, met with the parties on January 29 and January 30, 2013. The result of the mediation was a
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Memorandum of Settlement, which resolved virtually all issues in dispute with one remaining issue,
wages, reserved for arbitration. This award deals with that last issue.
The relevant portion of the Memorandum of Settlement reads as follows:
“1 Wages- there is a three-year agreement. [From July 1, 2013 to June 30, 2016].
There is general agreement between the parties that an “economic/tracking” agreement of 2.5%
[triangulated] in years one and two is not unreasonable. The parties agree to commence consultation on
the issue of triangulation of wages within 14 days of the signing of this Memorandum. The question that
will be referred to binding arbitration before a Board of Arbitration is whether a further increase which
the AUNBT asserts is required as catch-up, is justified and, if so, by how much.
The Board of Arbitration will determine the “economic/tracking” increase for year three, as well as
determine if “catch-up” is justified and, if so, by how much.”
Thus the parties jointly appointed this Board and agreed to be bound by our award.
Without meaning to be overly simplistic, the Association is seeking salaries comparable to those paid to
full-time academic staff in a comparable group of universities. There is no issue between the parties as
to what constitutes that comparable group. The Association then posits the proposition that the
comparisons to the average salaries at the comparable universities and the consumer price index are
the only criteria for setting economic adjustments. It further submits that if additional criteria are to be
considered, they should only be considered if the employer can demonstrate their appropriateness and
can show clear quantitative links to comparability. In the view of the Association, comparable means
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competitive and competitive is reached when the salaries at UNB are at least on par with the average
salaries of the comparator group for all ranks.
Having regard to the above, the Association submits that salaries at UNB are significantly below the
average for all ranks, that a catch-up of $4200 per year for each of the three years of the collective
agreement is appropriate and, additionally, an additional 2.5% tracking increase is appropriate in year
three.
Again, without meaning to be overly simplistic, the Employer takes a different view. It argues that the
appropriate approach to take in determining appropriate economic adjustments is to look at various
factors, including but not limited to, average and cumulative economic adjustments in the comparator
group. It acknowledges that the consumer price index has to be considered but, again, submits that that
is but one factor that has to be considered. Essentially, the Employer submits that appropriate wage
salaries are determined by comparison to the comparator group, the consumer price index, whether or
not the University has difficulty attracting and retaining qualified staff, comparisons with other groups
within the University, comparisons with wage adjustments in the province, the economic climate as well
as the ability of the Employer to afford the wage increase ultimately agreed to or, in the case of an
interest arbitration, ordered.
To properly understand the dispute between the parties, a history lesson is required. From 1995 until
2005, the parties agreed to, and the collective agreement provided for, a formulaic approach to
determining the appropriate wages for members of the bargaining unit. The formula provided for a
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group of comparator universities and provided as a stated objective “to have the UNB average salaries
falling into a band of 2% about the group average salary”. As described by the 2008 Joint Committee on
Economic Adjustments, the agreement provided for annual adjustments calculated as the three-year
average CPI, plus or minus any adjustments needed to bring the average salary within a band from -2%
to +2% of the projected group average salary plus specified lump sum adjustments.
During the collective bargaining in 2005, the formula was removed. In its place, the parties negotiated
article 36B .07which read as follows:
“The two Parties have negotiated collective agreements since 1982 that have contained salary and
salary scale adjustments related to the Consumer Price Index [CPI]. The Parties have also been tracking
the results of these adjustments by comparing the average salaries at UNB [as reported to Statistic
Canada] to a comparable group of 13 Canadian Universities.
The Parties agree that it is desirable to maintain a competitive position on the national market in order
to attract and retain quality faculty in the academic staffing of the University programs. The comparison
group of Canadian universities for purposes of defining a competitive salary was selected as being similar
in size and scope of programs to UNB and include: Memorial, Dalhousie, Carleton, McMaster, Ottawa,
Queens, Windsor, York, Manitoba, Saskatchewan, Regina, Calgary and Victoria.
In order to enhance planning in terms of academic programs, the parties agree that is desirable to
maintain a salary model, which provides a predictable salary bill over the lifetime of the collective
agreement. To achieve this, the parties have agreed to fixed percentage increases for economic
adjustments recognizing that these increases are meant to in part account for cost of living effects and
the need to be competitive with the comparison group.”
In the last round of collective bargaining, based on the Sims recommendations, the article was
amended. It now reads:
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“The parties have negotiated collective agreements since 1982 that have contained salary and salary
scale adjustments related to the Consumer Price Index [CPI]. The parties have also been tracking the
results of these adjustments by comparing the average salaries at UNB [as reported to Statistics Canada]
to a comparable group of Canadian Universities.
The parties agree that it is desirable to maintain a competitive position on the national market in order
to attract and retain quality faculty in the academic staffing of the University programs. The Canadian
comprehensive national universities agreed to be comparable and the means of keeping that group
current are contained in the comparable group of Canadian Universities Memorandum of
Understanding.”
There are now 14 universities in the comparable group. They are: Simon Fraser, McMaster, Waterloo,
Victoria, Carleton, Windsor, Guelph, Queen’s, Regina, Saskatchewan, Dalhousie, Memorial and
Manitoba.
The Sims recommendations are important, not for the results, or even the recommendations
themselves, but rather for the approach followed in formulating its wage recommendation. What is
obvious is that what has not been followed and, in fact, expressly repudiated, is any suggestion that any
formula should be used in determining appropriate wage increases. It is also made clear that in
determining an appropriate wage increase a multi-factored analysis must be undertaken. At page 17 of
the Sims recommendations, the following is written:
“These factors lead us to take very seriously AUNBTs strong feelings about the importance of
maintaining salaries within the competitive range represented by comparable institutions. However, this
falls short of establishing a need for a lock-step formula wage parity system. Other factors also influence
such decisions, although less easily quantified or lined up for comparison, despite the annual best efforts
of Maclean’s magazine.” [Emphasis added].
At page 40, the following is written:
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“Award
In making this recommendation we have taken into account all the considerations listed above.”
The considerations referred to were, in no particular order: ability to pay, historical links to comparator
groups, the economic climate, challenges facing the University, government funding, pensions,
contingencies and PTR increases, budget flexibility, internal comparables, salaries paid at the group of
comparable universities, Atlantic University settlements, salaries in New Brunswick, recruitment and
retention and research intensity.
The above listing is not inconsistent with the approach universally taken by arbitrators in considering
what is reasonable to award at interest arbitration. For over 30 years, if not longer, arbitrators in all
jurisdictions in Canada have provided that there are certain principles that should be followed. The most
important of these have been the principles of replication and comparability.
Replication, simply put, is an attempt by an arbitrator, or Board, to determine what the parties
themselves would likely have agreed to had they been able to resolve their collective agreement
through face-to-face bargaining. There is no obvious magic formula to achieving replication. It is for this
reason that arbitrators broaden their consideration and look at comparability. Comparability, however,
is multifaceted. It is not sufficient to look at what is provided in any one other collective agreement and
conclude that it is an appropriate comparable. Comparability specifically means looking at various
factors, including those referred to above, by the Sims Board.
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In the instant case, the Association submits that what has to be determined is what “tracking”
adjustment is required to keep parallel to what is earned at comparable Universities. It submits that a
catch-up of 12% is required to maintain that parallelism. The 12% calculation was reflective of the
analysis of the salaries at UNB and the group of 14 comparators. In response to questioning from the
Board, the Association acknowledged that there is no longer a formulaic approach such as there was in
the past, and further agreed that there could be factors that could reasonably justify a deviation from
the group of 14 comparators as the average salary target. The factors it concluded could provide such a
justification are CPI, provincial taxes, rank, discipline, experience and financial emergency.
The Employer submits that what has to be determined is what the appropriate economic increase is for
the last year of the collective agreement and whether any additional increases are required for the
earlier years. It submits that with respect to the latter point, no further increases are required, and
proposes that an increase of between 1 and 2.5% is fair and reasonable for year 3.
The approach that the Board has taken in determining what is appropriate is entirely consistent with the
universal approach followed by interest arbitrators. We acknowledge that the collective agreement
provides, and the parties agree, that there is a group of 14 Canadian universities that are to be used for
comparison purposes. We further acknowledge that the collective agreement does make reference to,
for example, the CPI. We do not accept the proposition, however, that these parties in collective
bargaining or a Board of interest arbitration is restricted either to looking at the group of 14 Canadian
universities as comparators or to only considering a single external factor such as the CPI.
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Further, the Board rejects the notion of tracking as used by the Association. In our view, if the word
tracking is to be used at all, it is not to be used as a means to get to a guaranteed end result. It is nothing
more than a statement that the parties will be looking at, or tracking, what is happening and what has
happened at the group of 14 universities.
In our view, the words of the current article 36B .07 at paragraph 2, as well as the predecessor article,
have considerable importance. The first sentence of the current article provides the concepts of
competitive position and the need to attract and retain quality faculty. The previous version used the
word “competitive” three times. We have examined the evidence presented by the parties very
carefully. We are of the view, based on the ability of the University to attract and retain quality faculty
that it is, in fact, in a competitive position relative to other universities elsewhere in Canada and within
the Province. It is important to this Board, in formulating its award, that this competitive position be
maintained. It is obviously critical to the long-term viability of the University that it continue to attract
students. Students attend universities for various reasons, but we believe it is obvious that one of the
reasons, if not the most important reason, that a student attends a particular University is because of
the nature and quality of the programs offered and of the quality of those teaching those programs.
Hence, the need to remain competitive.
Of significance, as well, is the ability of the University to maintain its infrastructure and to enhance it.
This University, like any organization that owns various buildings and facilities, must be able to maintain
those buildings and facilities. It also goes without saying, in our view, that part of the ability to attract
and retain not only students but also faculty are the physical facilities offered whether they be
classrooms, laboratories, research facilities, libraries, or dormitories. We are satisfied that the plan
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presented to us, as well as the dollar costs associated with that plan, is reasonable and must be a
consideration for the Board to take into account in terms of the ability of the University to fund
additional economic increases for its teaching staff.
The Board also has to take into account that the parties agreed to arbitrate this issue following a
mediated settlement to end the strike and lockout. Although the considerations normally brought to
bear at interest arbitration are still the predominant considerations that will lead to an end result, there
is no question that to give due weight to the principle of replication, the Board has to look at the
situation that prevailed when the parties entered into their Memorandum of Settlement. In our view,
based on our experience in this field, it is more than likely that had the parties eventually resolved their
differences without the involvement of a third-party, the end result would have been a settlement
providing for more than what was being offered at the time by the Employer but less than what was
being sought at the time by the Association.
Accordingly, having regard to all of the above, the Board awards economic adjustments as follows:
Year 1- A total increase of 3.5% (An additional 1%).
Year 2- A total increase of 4% (An additional 1.5 %).
Year 3- An increase of 5%.
The additional increases awarded are be made on a triangulated basis. Should the parties fail to agree
on how this is to be done, the matter is to be remitted to the Board.
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Retroactivity will be paid in accordance with the normal practice of the parties.
We thank the parties for their cooperation and thoughtful submissions and presentations.
The Board remains seized to deal with any issue arising from the interpretation or implementation of
this award.
Ottawa, this 29th day of September, 2014
M. Brian Keller, Chair
See dissent attached
Richard Petrie, Employer nominee
See dissent attached
Joël Michaud, Association nominee
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DISSENT OF EMPLOYER (UNB) NOMINEE, RICHARD G. PETRIE
I have reviewed the decision of Chairperson Keller. With the greatest of respect and regret, I issue this
partial dissent.
The economic adjustments Mr. Keller has determined appropriate are, in my respectful opinion, not
justified by the evidence or arguments before this Panel. The awarded increases are, in my view,
unreasonably high. Those increases go well beyond the economic adjustments experienced within the
comparable group of 14 universities. To give some context, the evidence before this panel was that the
average economic adjustments in the group of 14 comparator universities across Canada over the last
several years generally ranged between 2% and 2.25% per year. The awarded increases far exceed that
average and are particularly troubling in the context of the struggling economy and fiscal challenges
facing the Province of New Brunswick.
In my view, the Chair’s award on economic adjustments can only be explained by the particular nature
of this dispute.
Before this Board, the AUNBT had pursued its goal of obtaining economic adjustments based strictly
upon a formulaic approach. The AUNBT took the narrow position that economic adjustments are to be
based on achieving an equivalency to an “average salary” as found in the comparable group of 14
universities and for all ranks. CPI was given, at most, a passing reference by AUNBT.
On the other hand, the Employer’s comparability analysis used a much broader array of factors in
pursuit of replication, including but certainly not limited to total compensation comparabilities,
economic climate, budget challenges and any recruitment and retention issues, all to some degree or
another in comparison to the group of 14. In my view, the University was able to show that no further
economic adjustment was reasonably necessary beyond the University’s proposed economic
adjustments of, essentially, up to, 7.5% over three years.
To be clear, Chair Keller rejected the AUNBT’s position of comparability being based upon an
equivalency to average salary found in the group of 14. Chair Keller’s reasons confirm, in clear terms
and consistent with the Employer’s argument, that a broad based or traditional approach to the relevant
criteria of comparability is the correct approach for these parties. Chair Keller’s reasons, in my view,
definitively put an end to AUNBT’s stance based on the narrow concept of the average salary approach
to comparability. Chair Keller’s reasons, on this point, are well founded and entirely consistent with the
(2011) Sims Award between these parties.
How then can the actual economic adjustments awarded by Chair Keller be explained? Arbitrators have
been known to impose a “price” of sorts, on a party, in recognition of them obtaining vindication on an
important interpretative matter. The only reasonable explanation that I have for the excessive increases
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awarded by Chair Keller is that this is the “price to pay” for the University of New Brunswick, in order to
end, once and for all, the AUNBT’s arguments for, and reliance on, “average salary” being the main, if
not the only, applicable comparative criteria.
I would hope that this decision will remove that contentious issue from discussions and provide a
foundation for greater success between the parties, in negotiating future collective agreements.
I would like to express my appreciation to the Chair as well as my fellow sideperson, Mr. Michaud, for
their work on this matter. I also wish to acknowledge the helpful and professional work of the parties’
spokespersons throughout the hearing.
DATED at Fredericton, New Brunswick, this 29th day of September, 2014.
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Dissent of Board Member Joël Michaud
1. I have read the award of Chair Keller. I respectfully dissent, for two reasons:
a. Chairman Keller’s decision fails to acknowledge the paramountcy of the sole comparator agreed to by the parties and formalized in the collective agreement; and,
b. Chairman Keller’s decision fails to bring the salary of the AUNBT’s members to the average, or at least close to the average, of the agreed-upon Group of 14 figures.
Paramountcy and Catch-Up
2. This Board’s mandate was clearly spelled out in the terms of reference agreed upon by the parties,
namely, to determine catch-up in years one, two, and three of the agreement, and to set an economic adjustment (EA) for year three. The parties had agreed on the EA for years one and two and this agreement was implemented prior to the hearing.
3. All factors (other than the G14 average figures) were obviously taken into consideration by the parties in setting the EA in years one and two at 2.5%.In light of the evidence tendered at the hearing, there is no reason to believe that 2.5% would not have also been appropriate in year three. In the result, a reasonable award of EA should have totaled 7.5%, over 3 years.
4. However, Chairman Keller decided to award only a further 5% (1, 1.5, and 2.5 in years 1, 2, and 3 respectively). Instead of acknowledging the paramountcy of G14 and resulting catch-up required, Chairman Keller chose instead to rely on the “principle of replication” to justify the catch-up. In his view (and rightly so), had the parties been given the chance to finalize their collective agreement, the AUNBT would not have abandoned the collective-agreement dictated comparator.
5. It is unfortunate that Chairman Keller did not explicitly acknowledge the paramountcy of G14 in this case, like he did with respect to the key comparables in his Rouge decision relied upon by the AUNBT at the hearing. A clear statement to this effect would have been useful to the parties in future negotiations. It is hoped that UNB will nonetheless recognize the obvious rejection of its broad-based approach in future bargaining with the AUNBT, and agree to give appropriate weight to the G14 data in the determination of EAs and catch-up.
6. To be clear, I believe that the proper approach in future bargaining of salaries, under the terms of this collective agreement, is for the parties to start with the G14 average, and then consider other factors, but only insofar as they can be demonstrated to be relevant, and only insofar as proper
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quantitive data is produced. Personally, I was not swayed by much of the Employer’s data. In particular, I found the Employer’s evidence with respect to its restricted funds to be lacking and unsatisfactory.
Lengthy Catch-Up
7. University professors and librarians are not employed in essential services, and, as such, have a legally recognized right to strike. In this case, the parties felt compelled to resort to interest arbitration to resolve the strike. Otherwise, the AUNBT understood that it would be legislated back to work and that a dispute resolution process would be imposed without input from the parties.
8. Final-offer selection and legislated criteria sometimes prescribed by “return to work legislation”
were among the worrisome characteristics the AUNBT feared might be included in the legislation returning its members to work. This was undoubtedly a very difficult position to be in for the AUNBT as the mandate received from its members was to not only negotiate the usual EAs, but also to “fix” what was done by the Simms award, that is, a departure from G14. By the time the parties began negotiations, the AUNBT’s members’ average salaries were lagging behind the G14 average by approximately 12%.
9. The AUNBT’s biggest hurdle in this matter is that interest arbitration is generally recognized as a conservative process that rarely results in significant gains for one party or the other. Chairman Keller’s award confirms this. The AUNBT was looking for 12% as catch-up, but was awarded only 5%, or 41.6%, almost half of what was required to catch up to the G14 average. The impact of this award is that the AUNBT will again, in the next round of bargaining, be forced to make the same arguments in support of catch-up. What the AUNBT sought to accomplish in one round of bargaining will, in the result, require at least one more battle unless, of course, the G14 numbers come down drastically over the next few years.
10. I would have awarded the full 12% catch-up, spread over the three years of the contract, so as to allow the parties to focus on other important matters in future bargaining.
Conclusion
11. While I disagree with the results of Chairman Keller’s decision, I appreciated his patience and professionalism throughout and, in particular, his willingness to listen to all arguments. Likewise, my counterpart, Mr. Petrie, was always professional even though we rarely agreed.
12. The parties’ respective positions were often diametrically opposed. While the AUNBT sometimes enthusiastically challenged the Employer’s arguments, I was surprised by the stance taken by the
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Employer on a few occasions during the hearing. In my view, there is no room for statements that could be perceived as personal attacks or as attempts to ridicule the opposite party or it’s witnesses. After bargaining, conciliation, mediation, and particularly after a labour dispute, the parties must be able to turn the page and must remain able to resolve the various disputes that frequently arise in the application of the collective agreement. That is why it is a good practice, in the long run, to exercise restraint at critical stages of the process.
