October 19, 2011
41.4.23
Background
The employee grieved a number of issues related to the sale and purchase of a home under the Integrated Relocation Directive.
Bargaining Agent Presentation
The Bargaining Agent representative indicated that as a result of a lack of due diligence on the part of the Employer and the agent acting on behalf of the Employer, Royal LePage Relocation Services (RLRS), the obligations of the Integrated Relocation Directive (IRD) went unfulfilled, resulting in long-term negative financial and personal impacts for the grievor. Moreover, the capricious advice provided by the agents of RLRS led the grievor to make decisions that were rushed and ill-informed, and therefore not in the grievor's best interest.
The Bargaining Agent representative explained that the grievor submitted the "Employee Relocation Request Form" to the department on November 1, 2005. The grievor sought guidance from RLRS on November 18, 2005 and was informed that RLRS staff would contact the grievor at a later date. On November 21, 2005, the grievor was contacted by RLRS and sent documents required for consultation on the relocation which took place on November 30, 2005. The Bargaining Agent representative submits that the delay in consultation (from November 1, 2005 to November 30, 2005) is unwarranted and constitutes a breach of subsection 2.2.3.1 of the NJC Integrated Relocation Directive, "the Third Party Service Provider shall (…) establish contact with the referred employee within 48 hours and confirm personal information and counseling dates as per the contract", on the part of RLRS. Furthermore, the delay in referring the grievor to the third party service provider may demonstrate a failure on the part of the department to respect subsection 2.2.1.3 "the employer shall refer each employee to the Third Party Service Provider immediately upon issuing authorization to relocate".
On November 1, 2005 the grievor signed an offer to purchase a residence which was to remain open until November 18, 2005, pending a satisfactory building inspection and approval of relocation assistance pursuant to the IRD. The Bargaining Agent representative indicated that as the expected assistance did not materialize in time the grievor was forced to assume the cost of a home inspection before the offer to purchase ultimately lapsed. The grievor subsequently made a number of unsuccessful offers and commissioned an additional four home inspections. The representative noted that these have yet to be reimbursed as per section 9.14. The grievor was unable to secure a property prior to April 2006 due to market scarcity. The Bargaining Agent representative submitted that as a result of a rise of nearly 17.5% in home prices between mid-November 2005 and mid-April 2006 the grievor was forced to secure a much higher mortgage than had the purchase of the original property had occurred in November. The representative indicated that the difference when calculated over an amortization period of 15 years, at an interest rate of 4.19%, represents an additional cost of $90,358 over the life of the mortgage.
The representative explained that the improper requirement to submit a business case stems from the grievor's request for permission to wait until the spring to list the home in order to benefit from more favorable selling conditions. The representative noted that the grievor was informed of the requirement to submit a business case for such an extension, in accordance with section 8.2. The grievor complied, however the request was denied. The appraisal was therefore completed shortly after submitting the business case. The Bargaining Agent representative stressed that section 8.2 allows for a two year time limit to sell, therefore there was no need for a business case. The bargaining agent also noted that the IRD imposes no particular time frame within which an appraisal must be done consequently, had the grievor waited to have the property appraised after the market increase, there would have been the potential for a higher listing price. The denial of the business case also meant that the grievor had to forgo real estate fee reimbursement. This resulted in the grievor accepting an artificially low purchase price. Had the grievor been able to receive the assistance of a real estate agent a higher selling price could have been obtained. The representative added that the grievor was liable for payment of the mortgage discharge penalty as a result of erroneous advice from Home Loans Canada (HLC), acting on behalf of RLRS. The grievor was informed that the mortgage could be ported to a new property, when in fact, it could not. The mortgage discharge penalty was withdrawn from the personalized funds however the Bargaining Agent representative noted that in consideration of the circumstances, it should have been withdrawn from the core fund.
The Bargaining Agent representative concluded by stating that the grievor was not treated within the intent of the Directive resulting in financial losses.
Departmental Presentation
The Departmental representative indicated that the grievor was treated within the intent of the Directive on all matters grieved, and addressed each item of the grievance individually. With respect to the "Lack of due diligence in respect of consultation (section 2.2.2.3)," the Departmental representative indicated that the timeline for the commencement of the relocation proceedings with RLRS began the day the grievor signed the letter of offer (November 15, 2005), and from that day forward, RLRS acted within their service delivery standards, and provided accurate information. Furthermore, the Employee Relocation Form completed by the grievor on November 1, 2005 was an internal branch form used to gather preliminary information only. The representative noted that the form clearly states, "Before you start your move, please contact the Coordinator Administrative Services…to advise of pending activities."
With respect to the allegation of the "Improper requirement to submit business case to delay sale of home", the Departmental representative indicated that section 8.2 of the Directive identifies the requirement for employees to submit a business case when an extension to the prescribed time limits in situations where the sale of the home is delayed. The representative responded to the grievor's interpretation of section 2.13 of the IRD by noting that the two year time limit concerned the receipt of reimbursement on a relocation rather than the completion of a relocation.
The Departmental representative also indicated that the grievor was not denied the option not to sell under section 13.3.2.2. At no time did the grievor state that there was a desire to sell the home, only that there was a wish to delay the sale. The representative submitted that an appraisal was conducted on the grievor's principle residence following a request in January 2006. The grievor disputed the appraisal and requested that a second appraisal be conducted. The representative stated that the grievor was informed that a second appraisal would be funded through the ‘custom funding envelope.' The grievor however, declined the second appraisal. It was therefore the understanding of the department that the issue had been addressed.
The Departmental representative noted that the department has reimbursed the grievor for all submitted eligible receipts for home inspections. The one inspection which had been denied was ineligible for reimbursement, as it was conducted prior to the grievor's acceptance of the indeterminate position.
For the item, "Denial of benefits under section 8.12 in respect of return trips for appraisal purposes and to finalize sale of home," the department found that the grievor was ineligible for reimbursement of return trips to finalize the sale of her home. The grievor did not provide documentation to the Departmental National Coordinator indicating why the exchange of documents via courier or electronic means would not suffice to finalize the sale, as outlined in section 8.18.
The Departmental representative submitted that the grievor is not entitled to reimbursement of real estate commission fees as the business case was denied and the active marketing of the home was delayed contrary to TBS instruction. Furthermore, as the grievor sold the residence privately the grievor did not qualify for reimbursement of real estate commissions.
It was noted that the cost of the mortgage breaking penalty has since been moved from the personalized funds to the core envelope. However, the grievor has requested not to be reimbursed until this grievance has been resolved.
The Departmental representative indicated that the department has on several occasions requested that the grievor provide receipts in support of the claim for reimbursement of telephone calls associated with the relocation. It was noted that receipts were never produced.
Executive Committee Decision
The Executive Committee considered the report of the NJC Relocation Committee. It was agreed that the evidence presented indicated that the grievor was treated within the intent of the Directive with respect to consultation (section 2.2.2.3), the requirement to submit a business case to delay sale of home (section 8.2 and 2.13.1), the option not to sell (section 13.3.2.2), the appraisal value of home (section 8.9), return trips for appraisal and to finalize sale of home (section 8.12) and legal fees (sections 8.8 and 8.11).
More specifically, the Committee noted that the policy does not provide trips for appraisal purposes. The Directive states that where exchange of documents via courier or electronic means is not sufficient to finalize the sale, the employee shall be authorized to return to his/her previous place of duty to finalize the sale. The grievor however, did not submit documentation showing that it was necessary to be present.
With respect to legal fees (real estate commission and mortgage-breaking penalties), the Committee found that real estate commission was not payable in this case because private sale of a home does not incur a commission.
The Committee is of the view that the refusal to reimburse home inspections and absorption of costs of mortgage breaking penalty are moot, as both had been addressed at the previous grievance levels.
With respect to telephone costs in respect of the sale and purchase of a home, the Committee agreed that the department should absorb the telephone costs associated with the grievor's relocation and that the grievor should submit an itemized receipt for the applicable calls to the department for reimbursement.
As such, the grievance was upheld in part to the extent noted above.