Relocation Expenses

The employee grieved the Department's decision not to reimburse expenses directly related to relocation. The employee requested reimbursement of all expenses incurred related to the relocation.

The Bargaining Agent representative outlined the history of the grievor's employment. In April 1994, the grievor transferred from (Location A) to (Location B) and full relocation expenses were approved. In January 1995, the grievor won a competition and was deployed to (Location B). In February 1995, the grievor requested a transfer to (Location A) in order to care for an ill relative. In May 1995, the grievor began working (Location A) and no relocation expenses were reimbursed. In May 1998, the grievor sold her house in (Location A) and moved into an apartment. In January 1999, the grievor requested a transfer back to (Location B) which was granted in March 1999. In June 1999, she started her three-year assignment in (Location B).

The Bargaining Agent representative explained that there are three outstanding issues regarding this grievance which are as follows:

1.The expenses related to the grievor's second trip to (Location A) to finalize the selling of her home and oversee moving arrangements were limited to the lower kilometric rate. The Bargaining Agent representative maintained that the grievor is entitled to the higher kilometric rate for this trip based on article 2.13.2(d) of the Relocation Directive which states:

"Employees who are separated from dependants, and who are maintaining two houseolds, shall be entitled to: (d) another trip at the termination of this period, on an as-needed basis, to finalize selling or moving arrangements."

2.The administration fees incurred by the grievor to free up funds for a downpayment on a home in (Location B) were denied. The Bargaining Agent representative maintained that the grievor is entitled to be reimbursed for home purchase expenses even if she was not a homeowner at the former place of duty base based on article 3.7.3 of the Relocation Directive which states:

"Unless otherwise specified in this directive, it is not necessary for an employee to have been a homeowner at the former place of duty to be eligible for the reimbursement of the costs related to the purchase of a principle residence."

3.The costs incurred by the grievor for the selling of her house in (Location A) were denied. The Bargaining Agent representative believed that these costs are legitimate, reasonable and compatible with the intent of the Directive given that the relocation was subsequently authorized. Article 1.1.1 of the Relocation Directive states:

"If an employee incurs expenses related to a specific relocation before having received written authorization to relocate, the employer shall not be responsible for such expenses, unless and until the relocation is subsequently authorized."

The Bargaining Agent representative further maintained that these costs were in reasonable anticipation of the grievor's relocation which was subsequently authorized. Article 1.1.1 of the Relocation Guide states:

"Expenses obviously must have been incurred in reasonable anticipation of that relocation".

The Bargaining Agent representative indicated that as the grievor requested a transfer back to (Location B) several months after she had sold her house in (Location A), the employer may believe that there is no correlation between the sale of her house and the subsequent relocation. He submitted that there was an obvious connection between the selling of the grievor's house and her subsequent relocation.

As quoted in the grievor's memo of July 24, 2000 to management, the grievor never once gave up her original plans of returning to (Location B). During the years at (Location B), the grievor maintained contact with staff members regarding a possible return. The grievor had no reason to ever doubt that she wouldn't return to (Location B). The grievor confirmed having sold her house in May 1998 in (Location A) in anticipation of returning to (Location B). The grievor choose to sell her home then, as she received a fair offer and, based on her previous experience, the market was very slow for houses within that price range and area. The Bargaining Agent representative further stated that the grievor was never provided with a copy of the Relocation Directive and that despite repeated requests for assistance in interpreting the directive and requests to meet to discuss her claim, she never met the Departmental contact until months after the relocation. The Bargaining Agent representative believed that the grievor was not provided the level of assistance that she required and that is suggested in the Relocation Directive.

The Departmental representative addressed the same three issues:

1.Regarding the expenses related to the grievor's second trip to (Location A) to finalize the selling of her home and oversee moving arrangements, the Departmental representative maintained that the grievor was properly reimbursed, at the lower kilometric rate, as per article 6.8.3 of the Relocation Directive which states:

"If travel by vehicle(s) is authorized, the employee shall be paid at the rate specified in Appendix B of the Travel directive (the lower rate), for the distance of the journey… Minor detours during travel, to find accommodation or food, shall be considered as necessary relocation travel."

2.As for the administration fees, the Departmental representative explained that these fees represent the penalty for early withdrawal of funds from investments that the grievor had to pay in order to free up funds for a downpayment on her home in (Location B). It is the employee's responsibility to secure necessary funds towards the downpayment on a house or alternatively to decide to rent or buy. The grievor's suggestion that this claim is in lieu of the mortgage default insurance is irrelevant as the grievor would not have qualified for this allowance as at the time of the authorized relocation agreement, she was not a home owner; she was renting an apartment at her former place of duty. Article 3.8.7 of the Relocation Directive states:

"An employee who is obligated to pay mortgage default insurance premium and an insurance processing fee may be reimbursed these costs, upon the presentation of proof of payment, under the following conditions:

(a)the employee was a home owner at the former place of duty;

(b)the need for such insurance is verified, ie: the employee's equity is less that 25 per cent of the cost of the house or any other percentage level established by major lenders in the area; and

(c)the premium is levied in one payment."

3.Regarding the costs associated with the sale of the grievor's house, the Departmental representative noted that there were no prior verbal or written authorization given to the grievor. The main reason the grievor decided to sell the house was motivated by personal reasons. Article 1.1.1 of the Relocation Directive states:

"If an employee incurs expenses related to a specific relocation before having received written authorization to relocate, the employer shall not be responsible for such expenses, unless and until the relocation is subsequently authorized."

The Departmental representative further maintained that when the grievor requested a transfer, she was residing in an apartment which, consequently, became the employee's principal residence. Article 3.4.1(a) of the Relocation Directive states:

"When a homeowner employee is authorized to relocate within Canada and sells the principal residence at the old place of duty, reimbursement shall be authorized for a number of the costs related to the sale of the home, provided that: (a) at the time of the notification of relocation, the principal residence was occupied by the employee;"

The Departmental representative also quoted the grievor's memo of July 24, 2000 to management in that the grievor states: "In May 1998, I chose to sell my home of 23 years and move into an apartment. I was fully responsible for this decision and accordingly absorbed the real estate and lawyer fees to do so."

In closing, the Departmental representative reiterated that no agreement or any prior commitment, verbal or in writing, was made to the grievor to the effect that the Department would pay for any costs related to the sale of her home. In fact, it was a surprise to management to get such a request. It was the grievor's own and stand-alone decision to sell her house in May 1998. The grievor's Assignment Agreement provides for relocation expenses for the assignment but not retroactively.

The Executive Committee considered and agreed with the Government Travel Committee report.

Regarding the reimbursement of expenses for the second trip home, the Executive Committee agreed that the grievor was not treated within the intent of the Relocation Directive in that article 2.13.2(d) applies in this case and the grievor was entitled to reimbursement at the higher kilometric rate.

Regarding the reimbursement of the administration fees to free up funds for a downpayment on a residence in the other city, the Committee agreed that the grievor was treated within the intent of the Relocation Directive in that the grievor's former principal residence had been sold; therefore, the provisions regarding administration fees outlined in article 3.8.2(b) of the Relocation Directive did not apply.

As for the reimbursement of the costs associated with the sale of the grievor's home prior to the relocation, the Committee could come to no agreement as to the intent of the Relocation Directive and therefore reached an impasse on the matter.

The Executive Committee agreed to uphold the grievance to the extent described above.