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EMPLOYEE RIGHTS AND BENEFITS - Remuneration

Wednesday, June 03, 2020 @ 7:00 AM  


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Appeal by the Attorney General of Canada from a Federal Court judicial review judgment that overturned the denial of the grievance of the respondent, Zalys. The respondent was a regular member of the RCMP who retired after 37 years’ service. He held the rank of staff sergeant, a non-commissioned officer rank. When employed, the respondent was entitled to paid annual leave and service pay based on length of service. Upon retirement, the RCMP offered the respondent the option of taking accumulated unused leave and postponing his retirement date or taking a lump-sum payment because of the unused leave. In accordance with the respondent’s request, the RCMP paid out the value of the accumulated leave but did not add any amount because of service pay based on its interpretation of the Administration and National Compensation Manuals. The respondent filed a grievance, seeking the $7,257 in service pay that he would have received had he not taken a lump-sum payment. The adjudicator found that the RCMP’s exclusion of service pay from the lump-sum payout was not inconsistent with legislation or applicable RCMP and Treasury Board policies. On judicial review, the Federal Court found that the adjudicator’s decision was unreasonable and remitted the matter with a direction that the term “substantive salary” in the Manuals included accumulated service pay. The Crown appealed.

HELD: Appeal allowed. The Federal Court was insufficiently deferential and erroneously engaged in a standard of review akin to correctness. The adjudicator’s decision dismissing the grievance was reasonable. The adjudicator reasonably interpreted the term “substantive salary” as having a restrictive connotation that denoted a base salary void of other forms of allowances or compensation. The adjudicator was entitled to find that the interpretation did not result in an inequity due to consistency with how the officer cadre was paid out, and the available option to receive service pay by taking unused leave prior to retirement. The adjudicator provided a reasonable explanation for why service pay was not tied to annual leave, but was instead tied to salary, which a retired member no longer received. While it would have been preferable for the adjudicator to acknowledge that the definition of an “allowance” included service pay, which was excluded from the definition of “salary”, the failure to do so did not render the decision unreasonable as a whole. The adjudicator’s decision was thus restored.

Zalys v. Canada (Royal Canadian Mounted Police), [2020] F.C.J. No. 536, Federal Court of Appeal, R. Boivin, M.J.L. Gleason and M. Rivoalen JJ.A., April 28, 2020. Digest No. TLD-June12020006