# 2012-044 Pay and Benefits, Overpayment, Remission

Case Summary

F&R Date: 2012–08–24

In 2005, the grievor enrolled in the Reserve Force (Res F) as an infantry officer in the rank of second lieutenant (2Lt). In September 2006, he was offered enrolment in the Regular Force (Reg F) as a Direct Entry Officer (DEO) in the Maritime surface and sub-surface (MARS) occupation at the rank of Sub-Lieutenant (SLt); the grievor had previously been granted the basic military officer qualification (BMOQ). The grievor questioned why he would be offered a higher rank in the Reg F than in the Res F and was told it was due to his prior experience and the fact that the MARS occupation was understrength. The grievor was transferred to the Reg F on 8 December 2006.

In October 2009, as a result of a file review, a new enrolment, transfer and posting (ETP) message was released amending the grievor's rank upon component transfer (CT) from SLt to Acting SLt (A/SLt) and the grievor was informed that this rank change resulted in an overpayment in excess of $17,000.

The grievor argued that he showed due diligence in questioning the offer of a higher rank and stated that the recovery of any funds would be a breach of contract by the Department of National Defence. He indicated that the reduction in pay, as well as having to pay back a substantial amount, placed him in severe financial hardship. He requested that he not be held responsible for the debt with was a result of a mistake made by the Recruiting Centre.

Although the Commander Canadian Forces Recruiting Group (Comd CFRG) was identified as the initial authority (IA), he later determined he could not act as such as he did not have the authority to grant the redress sought. The grievance was forwarded to the Chief of Military Personnel (CMP) who rendered a decision in the matter. The CMP stated that the grievor should have been paid under Compensation and Benefits Instructions (CBI) 204.211(9)(a)(i) table B, level C because he was enrolled under the DEO plan and the pay rate of someone with no former non-commissioned service applied to him. The CMP pointed out the Crown had a legal right and a moral responsibility to recover the overpayment, no matter the impact on the grievor; he added the Treasury Board (TB) debt remission regulations do not apply to serving members as collections can be done at source.

As a preliminary issue, the Board pointed out that the condition of being able to grant redress only applies to a Commanding Officer acting as IA. In the case at hand, the Comd CFRG was the "Commander" responsible to deal with the matter grieved and therefore was properly identified as the IA.

Before addressing the overpayment issue, the Board was of the opinion that it was important to confirm that the amended rank was in fact the rank the grievor should have been granted upon transferring to the Reg F. In their explanation, CFRG Headquarters (HQ) provided that officers enrolled under the DEO plan are paid as 2Lt/A/SLt while wearing the rank of Officer Cadet until they complete their BMOQ at which time the promotion is backdated to the date of enrolment. Applying this rationale to the grievor's circumstances, CFRG HQ concluded that having been given a BMOQ bypass, the grievor's rank was correctly amended to A/Slt. The Board was of the view that this corrected rank was not in line with the applicable policies because Canadian Forces Administrative Order (CFAO) 11-6 on which CFRG HQ relied to make its determination applies to a DEO who is enrolled directly from civilian life - as indicated in the grievor's offers, he was not enrolled directly from civilian life, but was transferred from the Res F.

In the Board's view, paragraph 23 of CFAO 11-6 which provides that an officer may be transferred from a sub-component of the Res F in such a rank or granted such acting rank as is authorized by National Defence Headquarters (NDHQ), was the applicable disposition to the grievor's transfer. Furthermore, the Board noted that NDHQ issued and Instruction, Assistant Deputy Minister (Human Resources - Military) Instruction 07/05 - Canadian Forces Component Transfer, which complements Defence Administrative Order and Directive (DAOD) 5002-3 - Component and Sub-Component Transfer, to deal explicitly with CT situations. The Instruction provides that rank, upon CT, is protected, under certain conditions at the uncontrolled rank level (captain and below). One of the conditions is that the member must have skilled status at the time of CT. The Board pointed out that for a reservist, regardless of the targeted military occupation, a skilled status is granted if there exists the equivalent of 36 months of full-time paid service (FTPS). In the grievor's circumstances, he could not have 36 months of FTPS when he transferred in December 2006. Consequently, the Board found that, short of the Chief of the Defence Staff (CDS) making an exception to the policy, the grievor should have been transferred as a Naval Cadet (NCdt).

That said, the Board was of the opinion that, in this case, the CDS should make an exception because if the grievor had been released from the Res F and immediately re-enrolled in the Reg F as a civilian, he would have been enrolled in the DEO program as an A/SLt; in the Board's view, having been transferred from one component to the other, the grievor was unfairly disadvantaged by the current instruction. Interestingly enough, the Board pointed out that whether the grievor would have transferred at the rank of NCdt or A/SLt, his rate of pay would not change; his pay had to be established pursuant to level C of Table "B" to CBI 204.211(9) given that he had no non-commissioned member service. Accordingly, the Board found the grievor was not entitled to the rate of pay indicated on his original ETP message.

On the issue of overpayment, the Board agreed with the grievor that he should not have to pay back this amount as it was part of the offer to convince him to transfer in the Reg F; the grievor was diligent in requesting that his pay level be confirmed before accepting the offer and the error was solely the CF's responsibility. The Board was of the view that the CF had broken a promise made to the grievor who should be compensated accordingly.

The Board noted that in this decision, as well as in previous decisions, the CMP continues to state that remission does not apply to serving members; the Board reiterated its opinion that all Canadians, including CF members, have recourse to these remedial provisions of the Financial Administration Act (FAA).

The Board recommended the CDS uphold the grievance.

The Board recommended the CDS acknowledge the CF error that led to a breach of promise with respect to the rank and pay granted to the grievor on transfer to the Reg F and that the CDS consider providing financial redress for the breached promise through any mechanism available to him within the context of the grievance process.

Alternatively, the Board recommended the CDS forward the file to the Director Claims and Civil Litigation, with support and explanation, for review as a potential claim of breach of contract.

Alternatively, the Board recommended the CDS direct departmental authorities to prepare a TB submission requesting support for the remission of the debt, as per section 23 of the FAA.

Shoud the CDS request that a TB submission be prepared and submitted, the Board recommended the CDS suspend the recovery actions until the TB Ministers have rendered their decision.

The Board recommended the Comd CFRG be informed that in situations where Queen's Regulations and Orders for the Canadian Forces sub-paragraph 7.06(1)(b) is applicable, he is the appropriate IA.

The Board recommended the CMP be informed that subsection 23 (2.1) of the FAA regarding remission remains available to CF members.

CDS Decision Summary

CDS Decision Date: 2015–04–08

Case withdrawn at Final Authority level.