January 30, 2019
25.4.168, 25.4.169
Background
The employee works for Department A and accepted a posting to City B in Country Y from June 1, 2014, to May 2017.
The grievor received the Posting Confirmation Form on April 11, 2014, and immediately listed the principal residence in City C, Province H for sale.
The employee arrived at post on June 1, 2014, and because the principal residence was not sold yet, the grievor was approved for a waiver of shelter cost from the date of arrival, up to nine months (February 28, 2015) or until the residence sold.
By January 2015, despite reducing the price five times, the grievor’s principal residence was still on the market. The price was dropped almost $26,000 (~12% below the property assessment value) and the grievor received two offers which were both unsuccessful in closing at no fault of the grievor.
The grievor requested a shelter cost waiver extension of three (3) months and on January 20, 2015, Working Group B (WGB) denied the request on the grounds that the grievor had not demonstrated exceptional circumstances which were beyond the control of the employee. It was noted the employee had made the personal decision to sell and not rent the property. In addition, the extension of the shelter waiver is not approved in advance of the property being vacant.
Following this decision and the expiry of the nine month shelter waiver, the grievor again requested an extension adding that the decision to grant or deny mortgage financing to prospective buyers to close the sale of the property is beyond the grievor’s control and should be considered an exceptional circumstance. Furthermore, the current mortgage on the residence prohibits tenanting the property and therefore renting was not an option. WGB again denied the request on March 24, 2015, indicating that it was a personal decision to opt for a mortgage which prevented the grievor from renting the residence.
On June 26, 2015, the grievor sold the principal residence $40,000 below the original listed price and again requested that an extension be granted retroactively to cover the three month period from March to May 2015. WGB again denied the request indicating that exceptional circumstances as a result of factors outside the employee’s control have not been demonstrated. WGB adds that the provisions of section 16.4 of FSD 16 apply when as a result of short notice of posting by the employer, there has not been time to rent or sell the principal residence prior to leaving the headquarters city and the residence is vacant. The fact that the employee could not rent the residence was due to reasons within the employee’s control given the personal decision made in acquiring the mortgage.
Grievance
Shelter Cost Waiver Extension: The employee is grieving Working Group B’s decision to deny the request for the Employee Shelter Cost Waiver Extension for an additional three (3) months and that the denial is a breach of the intent of the NJC Foreign Service Directives.
Loss of Equity: The employee is grieving the department’s refusal to protect the loss of equity suffered as a result of accepting this assignment outside of Country X and that this denial is a breach of the Principles and intent of the NJC Foreign Service Directives.
Bargaining Agent Presentation
The grievor’s position requires a broad range of experience and exposure to different clients, geographical mobility is a condition of employment. Over a 16 year career as a public servant, the grievor has relocated twice under the NJC Relocation Directive (City D to City E; City E to City F). The grievor’s next move was set to be from City F to City G; however, while waiting for the paperwork to finish, the grievor received and accepted another opportunity in City B, Country Y for three years.
Shelter Cost Waiver Extension:
Regarding the request to extend the waiver of shelter cost, the Bargaining Agent Representative submits that the grievor did everything possible to sell the property within the initial nine month period, including lowering the price multiple times and accepting two offers that came in. Despite the decisions of Working Group B (WGB), it was argued that there were numerous exceptional circumstances at play which were outside the grievor’s control and which warrant granting the three month extension as provided for under subsection 16.4.5:
- The grievor accepted two offers, both of which were lower than the list price and the same or less than what the grievor had paid for the house in 2010. Both offers failed to close because the purchasers were unable to obtain financing, which is outside the grievor’s control;
- When the grievor acquired the mortgage in 2010, one of the conditions of the mortgage was that the property must be owner occupied and not tenanted. At the time of acquiring the mortgage, the grievor had no intent of ever renting the residence and therefore the mortgage conditions were outside the grievor’s control; and
- The grievor’s Terms and Conditions of employment require geographical mobility. Therefore, contrary to WGB’s decision, renting the residence was never considered an option. As the grievor did not expect to be returning, it was in the grievor’s best interest to sell the residence.
The Bargaining Agent representative submits that the grievor’s situation should be considered an exceptional circumstance as required by paragraph 16.4.5(a).
Loss of Equity:
Regarding the loss of equity, the Bargaining Agent representative submits that the grievor was not treated within the intent of the Foreign Service Directives and in particular, the Principles of:
Comparability - insofar as is possible and practicable employees serving abroad should be placed in neither a more nor a less favourable situation than they would be in serving in Canada.
Incentive-inducement - the employer must provide certain additional incentives both to attract employees to serve an occasional assignment outside Canada and to recruit and retain employees in a career foreign service.
[…]
To achieve the objectives of the Directives, consideration will continue to be given to situations which may arise which are not specifically dealt with in the Directives but which fall within the intent of the Directives as described in the basic principles outlined above or explained in the Introduction to a specific directive.
Due to the grievor’s service in City B, Country Y, the grievor was placed in a situation that was much less favourable than if the grievor had remained in Country X. The grievor had not anticipated any problems with the sale of the property, nor was the grievor aware the market was going to take such a rapid downturn. As a result of these issues and the grievor’s decision to serve abroad, the grievor suffered a loss of approximately $37,000 on the sale of the home, the difference between the appraised value and the sale price. Had the grievor accepted the posting to City G, the grievor would have been eligible for compensation for the loss of equity on the sale of the home under the NJC Relocation Directive.
Furthermore, subsection 15.1.3 of FSD 15 states:
It is the employer who decides whether an employee should be relocated, therefore, it is the sole responsibility of the employer to determine the relocation assistance that should be provided.
It is submitted that the grievor suffered a serious financial loss exclusively on the basis of choosing to serve Canada abroad and the employer should exercise managerial discretion under subsection 15.1.3 to remedy the situation and provide the relocation assistance in which the Directives intended.
Departmental Presentation
Shelter Cost Waiver Extension:
The grievor was in a dual-accommodation cost situation as per section 16.4 Principal Residence Vacant During Posting and was approved for a waiver of shelter cost up to the nine month period provided for in subsection 16.4.2. Although provisions exist for a further 3-month period, as explained by the grievor’s Foreign Service Advisor and Working Group B (WGB), the grievor would have to demonstrate the presence of exceptional circumstances. The grievor’s case was submitted and denied by WGB on three occasions concluding that the grievor did not demonstrate exceptional circumstances as a result of factors outside his control that would allow for the extension of the waiver of shelter cost provided in subsection 16.4.5 of FSD 16. The Departmental representative submits that the decisions of WGB respects and is in line with the intent of FSD 16.
Loss of Equity:
The FSDs do not provide provisions for loss of equity. Although Department A’s Relocation Directive provides provisions for Home Equity Assistance for members, the grievor is subject to the NJC Foreign Service Directives, particularly FSD 15 – Relocation. As there are no provisions for loss of equity, it is the Department’s position that the intent of FSD 15 was respected.
Executive Committee Decision
The Executive Committee reviewed the report of the Foreign Service Directives Committee and noted that it could not come to an agreement on the intent of the Directive. The Executive Committee could not reach consensus either. As such, the Committee reached an impasse.