Memorandum of Agreement: 2006

February 16, 2006

Now, therefore, the parties herin agree the following constitutes a full settlement of all matters.

The parties will also agree that the Inergi L.P. Agreement shall include the terms of the January 1, 2006 - December 31, 2008 Inergi L.P. Collective Agreement provided, however, that all matters set out in the attached statement of Agreement are incorporated into the Inergi L.P. Collective Agreement.

VRA AMENDMENTS

Amend as follows:

A Voluntary Recognition Agreement (VRA) between Ontario Hydro and the Society came into effect on January 14, 1992. A complete text of the VRA between Ontario Hydro and the Society is found in Appendix IV. The VRA, as amended in this Article, is applicable to Inergi. The VRA shall remain in effect thereafter except for Sections 4.0 and 5.0 of the VRA (outlined in Articles 14 and 15 of this Agreement) which may be terminated by written notice by either party not less than six months prior to the expiry of the Collective Agreement in operation on January 1, ~~2006~~ 2009 or any subsequent Collective Agreement. In the event that the Society provides notice of termination of Sections 4.0 and 5.0 of the VRA, Inergi may require that the supervisors defined in Section 8.1 form a separate bargaining unit for which the Society shall be recognized as the bargaining agent and for which there shall be a separate Collective Agreement. In addition, the Society shall continue to be recognized as the bargaining agent for non supervisory staff defined in the VRA. Disputes on the identification of supervisors shall be submitted to a mutually acceptable arbitrator for settlement. If the parties fail to agree to appoint an arbitrator, either party may refer the matter to the Minister of Labour (provincial or federal) or the Chief Justice of the Ontario Court of Justice who shall appoint a single arbitrator. The arbitrator will have the power accorded arbitrators under the Ontario Labour Relations Act and the Canada Labour Code. If Inergi provides notice of termination of Sections 4.0 and 5.0 of the VRA, it shall continue to recognize the Society as representing all employees in one bargaining unit as per the VRA and ensuing Collective Agreements.

In the event that either party desires to amend the VRA on or after January 1, ~~2006~~ 2009, it must notify the other party in writing not less than six months prior to the expiry of the Collective Agreement in effect on January 1, ~~2006~~ 2009 or thereafter six months prior to the expiration of any subsequent Collective Agreement. In such circumstances the parties will have the right, if either party so chooses, to appoint a mutually agreeable mediator for the purpose of reaching a settlement of the issues and where there is mutual agreement the mediator shall arbitrate outstanding matters in dispute.

Notwithstanding the above, the parties may mutually agree to amend the VRA at any time.

COLLECTIVE AGREEMENT TERM - NO STRIKE/NO LOCKOUT

9.1

Collective Agreement Term

Amend as follows:

This Collective Agreement shall remain in effect from January 1, ~~2004~~ 2006 to December 31, ~~2005~~ 2008 inclusive and, thereafter, shall be renewed automatically from year to year, subject to Section 4.0 of the Voluntary Recognition Agreement (VRA) as amended in the Collective Agreement, unless either Party notifies the other in writing not less than 90 days prior to the expiration of the Collective Agreement that it desires to amend the Collective Agreement. As long as Sections 4.0 as amended and 5.0 of the VRA remain in effect, where notice to amend the Collective Agreement is given, the provisions of this Collective Agreement shall continue in force until a new Collective Agreement is signed.

SOCIETY MEMBERSHIP AND DUES DEDUCTION

Add to Article:

10.3

Bargaining Unit Information

Management agrees to provide The Society with the following, on a regular basis:

A copy of the appointment letter, for employees selected to Society represented vacancies, will be copied to the appropriate Unit Director, within a reasonable period of time

Detailed records of dues deducted

Detailed information on the membership, including:

Occupation Code, Job Title, Salary Schedule, Salary Grade, Organization (e.g. Business Unit/Division/Department), Mailing Location, Phone Number

10.4

Management will provide a quarterly report to the Society of all non-Inergi staff doing work in Inergi. Management will provide identification of jurisdiction for each such person and exclusion criteria for the position.

DISCIPLINE AND DISCHARGE

Add to Article:

17.5

Disciplinary penalties resulting in a suspension without pay will not be imposed until a final decision (agreement between the Society and the employer, or an arbitrator's decision) has been reached.

The above is contingent upon the following:

The case is heard at the next step 2 meeting
If unresolved, heard at the next available arbitration date.

PART VIII - SALARY

Item	Year 1	Year 2	Year 3
Article 24.2 - Salary Schedule Increase	*3%	3%	3%
Competency Pay Pot	*1%	1%	1%
VIPP Pot - Meets Targets	4%	4%	4%
VIPP Pot - Exceeds Targets	2%	2%	2%

*Salary increases are retroactive to January 1, 2006

ESCALATOR CLAUSE

Amend as follows:

*25.1

In the event that Inergi and the Society negotiate a Collective Agreement for a term of more than one year, a Cost of Living Adjustment (COLA) escalator clause shall become part of such an Agreement and shall be applicable to all employees covered by that Agreement.

*Article 25.1 is suspended for the term of this Collective Agreement.

NEW ARTICLE - INSERT AS:

PAY PROGRESSION FOR GRADUATE HIRES

26.1

Inergi and the Society recognize the importance of hiring recent graduates from post-secondary institutions into Society positions for development. The starting salary and progression of such employees shall normally occur in three steps, each at six month increments.

26.2

The starting salary for such developmental positions will normally be 91% of the lower endpoint of the Band C salary range, and progress in steps to 94% at six months, 97% at twelve months and 100% at eighteen months following the commencement date.

26.3

The starting salary for employees with advanced degrees and/or prior applicable experience may be set at a higher intermediate step.

26.4

A progression step may be withheld due to unsatisfactory performance. In such cases the employee's performance will be reviewed at the next progression date and, if performance has been satisfactory, the employee will progress to the next step at that time. If progression is withheld due to unsatisfactory performance for two consecutive progression periods, there may be cause for termination.

26.5

A regular Band C base position for each developmental employee shall be identified at the time of the offer of employment for a new employee. The employee shall be assigned to that base position at the end of their third step.

PART X - HEALTH BENEFITS

Amend benefits effective January 1, 2006

Massage therapy increase from $500 to $600.00 a year with 50% coverage up to a maximum of $ 600. (up from$500)

PART IX - ABSENCE FROM WORK

NEW ARTICLE:

Inergi is prepared to incorporate language into the collective agreement consistent with recently passed legislation regarding unpaid family medical leave.

COMPENSATION ON SURPLUS TERMINATION

Amend as follows:

64.13.1

Payment in Lieu of Notice Entitlement Calculations

All full-time and reduced-hours employees hired before the ratification of the Collective Agreement, who are declared surplus will have a payment in lieu of notice entitlement calculated as follows:

no less than a 24 week basic payment in lieu of notice entitlement;

plus
service-based payment in lieu of notice entitlement equal to the sum of:
- two (2) weeks per year of service for the first five years of service, and
- one (1) week per year of service for service greater than five years, and
- employees with relevant previous experience will receive additional service-based job search credits based upon their highest salary grade within one year of hiring in accordance with the following:
Salary Band Hired Into Credit

Band C 4 weeks

Band B 8 weeks

Band A 12 weeks
For reduced-hours employees, the service-based payment in lieu of notice entitlement will be calculated as if all service had been worked full-time.

The total payment in lieu of notice entitlement will not exceed 60 weeks.

All full-time and reduced-hours employees hired on or after the ratification of the Collective Agreement, who are declared surplus shall have the above entitlements save and except the 24 week basic payment in lieu of notice entitlement. Such entitlement will be reinstated after the third full year of service.

PURCHASED SERVICES

67.5

Limitations and Caps

Amend as follows:

67.5 (a)

Blanket annual PSA approval will be granted by the Society to Inergi at the beginning of each calendar year, subject to the following conditions:

(i)	Inergi will maintain a level of Inergi Society represented employees based upon the number of FTE's required to perform sustainment work and project work, minus a reasonable cushion of up to 30% contractors to accommodate temporary workload fluctuations. The number of FTE's required will be determined annually by Inergi as part of the business plan following consultation with The Society. Management will meet with The Society quarterly to discuss the business plan with respect to outsourcing levels and any resourcing level adjustments that may be required during the course of the year.
(ii)	The skill level of regular employees will be enhanced and maintained. Where contractors have skills that will be required for sustainment work and project management work, the employer shall put in place a mechanism for a transfer of skills from these persons to regular employees.
(iii)	Prior to obtaining a contractor, all work assignments in excess of 6 months will be posted in accordance with Article 65. If a Society represented employee is successful his/her backfill need not be posted as per Article 65 and a contractor may be obtained directly to backfill such a position. If as a result of this article a Society position is back-filled without posting the appropriate Society Unit Director will be notified in writing.
(iv)	No regular employees will be adversely impacted, as defined in Article 64, as a result of the use of the contractors. It is recognized that Management may need to transition regular Society-represented employees into alternate roles, to facilitate the elimination of contractors. Where there is no adverse impact, the provisions of 64.7 will be used to carry out this redeployment. For these purposes, "division" in this section will mean either the "Information Technology" for the" Business Process Operations" organizations.
(v)	Contractor engagements or assignments shall not exceed 24 consecutive months.
(vi)	Contractors must have a break in service of 6 months or greater to reset the 24 month clock.
(vii)	If the number of contractors doing sustainment work and project work, expressed in FTE's exceeds by more than 30% the total number of regular FTE's within the Society's jurisdiction, as calculated in paragraph 1 above, Inergi will create one full-time regular Society represented position for every five contractors in excess of the threshold number. The 30% figure shall be calculated at the end of each calendar year, based on a weighted 12 month average of FTE's.
(viii)	A minimum of 25% of the total Society jurisdiction FTE's utilized on projects during the course of the calendar year shall be Society represented staff. Management will provide on a monthly basis, the total hours worked on projects broken down by regular Society staff hours and others performing Society represented work.

HOURS OF WORK

Add to Article:

68.4

Temporary Change to Work Day

In order to accommodate off hours customer implementations, on a temporary basis, and with a minimum of 1 week written notice, Management may seek volunteers from among employees asking if an employee agrees to delay his/her normal starting time by up to 8 hours. Overtime provisions will be applicable once the employee has exceeded his/her normal work hours (ie: 7 or 8 hours) for that day.

New Article

CONTRACTING OUT/RIGHT-SHORING PROTECTION

X.1

Definitions

For purposes of this article "Contracting out/Right-shoring" occurs when work performed by Society represented staff is moved outside of Inergi L.P. to another employer without the simultaneous transfer of the employees and recognition of successor rights by that employer.

For purposes of this article an "affected employee" is a regular Society represented employee who's work is contracted out/right-shored, until such time as they are redeployed into a permanent base position within Inergi L.P.

X.2

Inergi agrees that there shall not be any contracting out or off shoring of Society work which results in a reduction of Society represented staff.

The parties mutually agree that the following redeployment process will limit disruption for both the employees and the business.

It is agreed that an affected employee shall be provided with ongoing employment within Inergi without a loss of base salary, benefits and other contractual entitlements. Where required, an affected employee will receive reasonable and appropriate training to enable them to undertake their new role.

Affected employees will be given preference over all other Society represented employees for vacancies at their existing level for which they are qualified. Adhering to the principles of 65.3 and prior to posting any regular Society vacancy, qualified affected employees will be offered the position based on senior choice junior force.

In the event an affected employee requires retraining as a prerequisite to redeployment, reasonable and appropriate training will be provided. Once training is completed the affected employee shall be redeployed into an appropriate vacancy as soon as it becomes available.

An affected employee, if not redeployed to a permanent position, can be engaged in short term project assignments, for which they are qualified, with the agreement of the Local Society Vice President in order to perform meaningful work until they are redeployed into an appropriate vacancy.

If the employee refuses the offer of a permanent regular position the provisions of Article 64.11.3 shall govern the determination of whether or not the redeployment offer is reasonable and the parties agree that should the JROT be unable to reach agreement the matter shall be referred to arbitration for resolution.

Under this article, Inergi will not offer a Voluntary Severance Package to an affected employee, unless an affected employee asks to voluntarily terminate. In such event, he/she shall be entitled to severance in accordance with Article 64.13.2.2 (maximum as defined in Article 64.8) of the Collective Agreement. The Society shall be informed of any such requests received from an affected employee, prior to the approval of such a request by Inergi.

In the event the affected employee voluntarily terminates, a new position will be created and filled within 90 days of the termination, within the Society Inergi Bargaining Unit at the same band level, in order to maintain the staffing levels which existed prior to such affected employee's voluntary separation from the Company. Details of the created position will be provided to the Society prior to posting the vacancy.

X.3

(a)

On or after January 1, 2009 Inergi may give written notice to terminate this provision of the Collective Agreement. If notice is given during this period, this provision will be deemed terminated effective 24 months following the date of this notice.

(b)

Inergi recognizes and acknowledges that in giving notice to terminate this provision of the Collective Agreement, it is also serving notice for the termination of the Mediation/Arbitration provisions of the VRA (Sections 4.0 and 5.0) and the termination of Mediation/Arbitration takes effect 24 months following the date of notice given pursuant to (a) above.

(c)

Notwithstanding (a) and (b) above, The Society recognizes and acknowledges that in the event The Society gives notice to terminate the Mediation/Arbitration provisions of the VRA (Sections 4.0 and 5.0), Inergi may terminate this article by serving 6 months notice.

CHANGES TO THE COMPENSATION PLAN:

Management agrees that establishment of individual PDPs will also be governed under the March 31 deadline and should this deadline not be met the PDPs will be deemed as met.

Year end performance assessments will be completed no later than December 15 of the plan year.

Managers and their employees must make reasonable efforts to reach agreement on the employee's PDP/VIPP objectives and the related performance assessment by the specified dates.

For the 2006 performance year any payments associated with PDP/individual VIPP objectives deemed to be met due to missing the March 31 deadline, will be funded outside the individual VIPP and competency pots so as not to dilute the pot available to the other employees.

NOT TO BE REPRODUCED IN THE COLLECTIVE AGREEMENT

The Society's agreement in this regard is without prejudice to the Society's or the employer's position with respect to grievance 2005-010 at Arbitration and the agreement to these provisions shall not be raised by the Society or the employer in any such Arbitrations as affecting the Society's or the employer's position.

PART XVI - LETTERS OF UNDERSTANDING

CHANGE OF EMPLOYER AND VOLUNTARY CASH-OUT

Extend for the term of this Collective Agreement

#12

NEW LETTER OF UNDERSTANDING

To address staffing issues raised regarding Article 65 as it relates to cross bargaining unit resourcing flexibility Inergi is prepared to execute the following LOU. In exchange the Society will withdraw the grievance 2005-011 without prejudice.

The parties enter into this Letter of Understanding as it pertains to Article 94: Temporary assignment to another bargaining unit

Any temporary assignment under the provisions of the Article 94 - "Temporary assignment to another bargaining unit", that Inergi anticipates will exceed 6 months' duration, will be posted as a rotation under the provisions of Article 65 prior to implementation of Article 94.

Should the Society challenge or assert that the existence of this letter of understanding does not constitute reciprocity with the NHSS/Society agreement by grievance, it shall be rendered null and void and the collective agreement provisions governing resource flexibility shall stand without qualification.

#13

NEW LETTER OF UNDERSTANDING

With respect to providing additional pension security during the term of this collective agreement and in the event the pension plan is in a solvency deficit position, Inergi will fund the current service costs up to the maximum tax deductible contribution based on a solvency valuation that includes indexation.

Language Finalization

(Not to be reproduced in the collective agreement)

The parties agree to meet to delete items from the collective agreement mutually agreed not to be relevant to the business within 90 days of ratification.

Further within 90 days of the ratification of this agreement the parties agree to incorporate, as applicable, relevant terms of this memorandum of settlement into the collective agreement. Should the parties fail to agree in how to incorporate applicable and relevant terms regarding this Memorandum of Settlement, either party may refer the matter to arbitrator Brian Keller for expedited final and binding resolution.