Union claimed reductions to sales commissions violated collective agreement, employment standards
An arbitrator has dismissed a grievance brought by Unifor against the Globe and Mail, ruling that the newspaper’s sales commission plan is not subject to arbitration under the current collective agreement.
The case arose when the union alleged that the Globe and Mail violated both the collective agreement and provincial law by reducing commissions payable to a salesperson, Adam Wilson. The union argued that commissions, like salaries, should be protected under the collective agreement and that the employer’s unilateral reduction was “contrary to the collective agreement and statute; namely the Employment Standards Act (ESA).”
The employer countered that its Brand Partnership Manager Sales Incentive Plan was “totally outside of the collective agreement, and as its application and administration fell entirely within management’s discretion, it was not subject to arbitral review.”
The plan explicitly reserved management’s right to “change any portion of its compensation programs” and to “reduce, modify, or withhold commission payments based upon individual performance or management modification of the Program.”
Sales commissions not in collective agreement
In his decision, Arbitrator William Kaplan found that the sales commission plan is not mentioned in the collective agreement.
“Salaries, which are bargained, are expressly referred to, but reading in commissions to that term would, in the circumstances, be an unjustified and unsupportable stretch,” Kaplan wrote.
He noted that the only references to commissions in the agreement were for severance calculations and for providing information to the union.
Kaplan stated, “If the parties had wanted to define salaries as including commissions, they could easily have done so. There is no reason to believe that the parties intended salaries to include commissions; the evidence as demonstrated by an analysis of the collective agreement is otherwise.”
Previously, Ontario’s Superior Court of Justice dealt with a case that centred on whether an employer could unilaterally change commission structures despite explicit contractual protections that had been carefully negotiated to prevent such modifications.
What is covered under the collective agreement?
In the decision, Kaplan cited previous arbitration decisions, noting that “not all disputes pertaining to employment-related statutes are arbitrable.”
“The fact that commissions are a monetary benefit does not mean that they are arbitrable. It is not uncommon for parties to place, for example, pension and benefits outside of a collective agreement, as they have done here with commissions,” he said.
Kaplan concluded, “A review of the collective agreement establishes that the parties – for whatever reason – chose not to include commissions (or the terms of the Plan). A review of the Plan – which is readily available for all to see – makes it clear that it is, by deliberate design, intended to repose sole discretion about its administration…in the hands of the employer.”
The grievance was dismissed and the employer’s preliminary objection was upheld.
Earlier this year, Unifor also filed a grievance alleging that the Hudson’s Bay Company was “unilaterally slashing workers’ commission pay” as it proceeded with its liquidation.
