April 25, 2013
25.4.156
Background
In September 2010, the Embassy relocated from City A, to City B. On October 1, 2010, one of the grievors, enquired to the Department's headquarters (HQ) about a Post Index (PI) for City B, as the cost of living appeared to be higher than in City A. The reply led the grievor to believe that the survey for the PI could only be undertaken in 6 months, to allow for a purchasing routine to be established and that the City B allowances would be prorated accordingly once the figures became available.
On May 30, 2011, the grievor contacted HQ to have the PI survey completed. The information to conduct the survey was sent to the mission in June 2011. Due to the work required to fill out the survey, the members of the Embassy requested, on September 27, 2011, to use the U.S. Department of State numbers. They were advised that the U.S. numbers had been, in fact, the basis for the City B PI since August 2010. As such, the grievors decided to continue with the survey exercise, which was completed in December 2011.
Statistics Canada announced the PI for City B on February 3, 2012, effective February 1, 2012. The updated PI was 116, whereas the PIs to calculate payments before February 2012 were around 102. The grievors sought that the updated PI be applied retroactively to the official date of relocation, September 20, 2010.
The Department advised that an updated PI could be applied retroactively only if erroneous rates were used, Statistics Canada had made an error, or in a case of a new location where personnel are already in place but a PI has not been requested. It refused to apply the updated PI retroactively, as it is of the view that none of these cases applied. The Department refers to the Guide to the Post Index to explain that when a PI is required for a location where Statistics Canada has not undertaken a Cost of Living Survey, the procedure normally followed involved linking the required PI to an existing Statistics Canada PI where one exists in the same country or, alternatively, using the US Department of State numbers.
Bargaining Agent Presentation
The Bargaining Agent representative indicated that the grievors were not treated within the intent of the Directives. As FSD 55 is silent regarding retroactivity as it applies to a new mission, the principle of comparability and the intent of FSD 55, which is to assist employees at posts where the cost of living is higher than in Ottawa/Gatineau, and to provide these employees with an allowance to compensate for the higher costs of purchasing goods and services at post, must be applied. Furthermore, the six-month waiting period that Statistics Canada requested that the mission wait before completing the survey to allow for a purchasing routine to be in place is not part of FSD 55. Finally, the Bargaining Agent representative stated that the use of a US-based index is not provided for in FSD 55 and resulted in a Post Index that was lower than the Post Index had the Index been based on a Statistics Canada Survey. As such, the Bargaining Agent representative stated that the Post Index for City B, announced by Statistics Canada February 3, 2012, should be implemented retroactively to September 2010.
Departmental Presentation
The Departmental representative explained that the Department considers that a valid Post Index for City B was in place as of August 2010. The PI was determined by Statistics Canada and the methodology used to establish it was in accordance with the section 9 of the Guide to the Post Index, which was approved by the National Joint Council. The Department simply applied the PI that was provided by Statistics Canada in accordance with FSD 55.1.1(c)2). Similarly the Department applied the six-month waiting period prior to conducting the survey as this is what Statistics Canada has recommended in similar cases. Finally, the Departmental representative noted that FSD 55.4.3 (a) clearly indicates that the changes to the Post Index shall be effective on the first day of the month next following the month in which Statistics Canada has made its determination when it is resulting from a full scale survey. Section 7 of the Guide for the Post Index clearly identifies the circumstances in which the NJC has decided that retroactive adjustment should apply. The Department believes that none of the identified criteria apply to the City B mission situation. As such, the Department believes that the grievors were treated within the intent of the Directive.
Executive Committee Decision
The Executive Committee considered and agreed with the report of the Foreign Service Directives Committee which concluded that the grievors were treated within the intent of the Directive in part. The Committee confirmed that The Guide to the Post Index published by Statistics Canada forms part of the directive as part of the agreed to methodology by the NJC (FSD 55.4.1) and provides clarification on retroactivity and the use of U.S. based rates. The Committee agreed that Statistics Canada, and in turn the Department, followed the methodology in part for developing a Post Index for City B by correctly using the Ottawa adjusted U.S. based rates in this case. Furthermore, it was agreed that the City B scenario does not meet the criteria for retroactive payment as set out in The Guide to the Post Index.
However, the Committee noted that the six month delay which was required by Statistics Canada and the Department prior to beginning the survey is not part of the agreed upon methodology. Thus, the Committee agreed that the grievors be compensated for the six month waiting period in question using the Post Index calculated, based on the Survey, for February 2012 at the monthly rate (i.e. incorporating the monthly inflation and exchange rate) from October 1, 2010 – March 31, 2011. As such, the grievances are upheld in part.