Background
In June 2019, the Ford government in Ontario proposed Bill 124: Protecting a Sustainable Public Sector for Future Generations Act, 2019. This legislative measure aimed at long-term sustainability in the public sector, advised that any collective agreements in effect on June 5, 2019, would be subject to salary caps. These caps, known as a “financial moderation period” were to commence the day after the expiration of these agreements (Goldblatt Partners LLP, 2019).
The moderation period mandated any salary settlements across Ontario’s public sector not exceed one percent. This limitation applied to all public sector unions (and non-unionized groups), restricting pay increases to one percent annually for three years under the terms of Bill 124 (OPSEU SEFPO, 2021).
Once passed and proclaimed on October 31, 2019, Bill 124 was retroactively enforced to June 5, 2019. This meant any settlements, including arbitration awards, achieved after June 5, 2019, were subject to the restrictions contained in Bill 124 or risk being declared void (Goldblatt Partners LLP, 2019).
Bill 124 also included Anti-Avoidance Measures, which prevented public sector employers from providing compensation before or after the applicable moderation period to offset the imposed financial cap. The effect meant that agreements expiring on or shortly after June 2019, with three-year terms, would be subject to further renewal under the legislation before its eventual repeal (OPSEU SEFPO, 2021).
In November 2019, four Ontario teaching unions launched the first constitutional challenge against the government and Bill 124, claiming it was a direct attack on the bargaining rights of public sector workers. It would take more than three years for the Ontario Superior Court to rule Bill 124 unconstitutional, and on February 23, 2024, the Ontario government repealed the Act in its entirety, forcing the sector to adapt quickly (Law Times, 2021).
Impact
My perspective is informed through my experience with bargaining in the higher education sector in Ontario. The impact of Bill 124 on each institution varied depending on where they were in their bargaining cycle. Active bargaining occurring on or after June 5, 2019, required the clawback of any monetary proposals exceeding the financial cap imposed by Bill 124. Those who had recently ratified newly negotiated agreements were not required to comply with the three-year moderation period until their agreement’s expiration and renewal (OSSTF/FEESO, 2019).
With most public sector employers managing multiple union groups, each subject to different negotiation timelines across multiple sectors, the impact of the legislation was significant for some and nominal for others. Institutions that were able to defer the moderation period to the latest possible date may have avoided it altogether. This was the case for one specific Ontario university that freely negotiated increases, setting a precedent for many arbitrated awards in higher education (OPSEU SEFPO, 2021).
The impact of the Bill was particularly devastating for public sector employers unable to set aside budget reserves to cover retroactive salary awards following the legislation’s repeal (Law Times, 2021).
Strategies
Different strategies for managing a possible repeal of Bill 124 were employed across the public sector. The strategy we adopted was to pre-negotiate the outcome, should the Bill be repealed. In doing so, it was important to differentiate between repeal and appeal as these represented distinct stages in the process, each triggering a different implementation date.
Other organizations chose to agree to a Letter of Understanding in which they would open any monetary articles should the Bill be repealed. However, there are two major concerns with this approach. First, to achieve a settlement there may have been non-monetary concessions that would not have been agreed to under typical conditions, and these would not be reversed with a monetary re-opener. Second, the wage reopener would be subject to the agreement of both parties with arbitration as the agreed-upon form of dispute resolution should there be an impasse. These arbitration awards have been very rich with affordability not seeming to be a major factor (Law Times, 2021).
Our approach of pre-negotiating the outcome did not require the parties to re-open the collective agreement and return to the table. We simply applied the monetary agreement upon the effective date of the repeal. These monetary agreements were prospective only and within our budgeted mandate, limiting the risk of an arbitrated financial award that was not affordable for the university (Goldblatt Partners LLP, 2019).
Aftermath
In the aftermath of Bill 124’s installation and repeal, significant market differentials have emerged due to large disparities in monetary agreements across the public sector (Law Times, 2021). Those currently negotiating or preparing to enter negotiations will likely encounter sector compensation comparator data that highlights the relative position of the applicable union group today and before Bill 124. Over the past several months, the province has been renegotiating contracts and repaying tens of thousands of workers (Goldblatt Partners LLP, 2024).
The Association of Management, Administrative and Professional Crown Employees of Ontario (AMAPCEO), which represents 16,000 workers in the Ontario Public Service, received a 7.5 percent salary increase with back pay in October (Goldblatt Partners LLP, 2024). The Ontario Nurses Association was granted a 6.75 percent increase for the Bill 124 years, while civil servants were given 9.5 percent for their three-year period (OSSTF/FEESO, 2019). These settlements, largely unaffordable and with no government assistance, may have other significant consequences such as future and continued budget cuts as well as layoffs.
Having recently negotiated five post-Bill 124 Collective Agreement renewals, we granted significant market adjustments to bring employees on par with their relevant sector comparators. However, the inability to afford retroactive increases may leave employees feeling unsatisfied with the outcomes, potentially jeopardizing the ratification process for many employers. For employees without union representation, the impact may never be fully reversed (Goldblatt Partners LLP, 2024).
About the Author
Allison Arnold is a seasoned labour relations specialist with over 30 years of Human Resources experience within the broader public sector, with a particular focus on higher education. As Chief Negotiator, Allison has successfully led multiple negotiations with unions spanning from OSSTF, OPSEU, CUPE, PSAC, UFCW, IATSE, and WLUFA. Certified in Conflict Management and Mediation from Conrad Grebel University College, Allison demonstrates exceptional leadership in grievance and arbitration hearings, providing strategic guidance during periods of labour dispute. An alumnus of Queen’s Masters of Industrial Relations and the Queen’s University IRC, Allison employs a strategic and interest-based approach to collective bargaining. Throughout her career Allison has held several key positions, including AVP Human Resources and Director of Faculty and Staff Relations at Wilfrid Laurier University. She is passionate about mentoring the next generation of labour relations and conflict resolution professionals.
Bibliography
Goldblatt Partners LLP. (2019, November 9). Ford government passes Bill 124 – updated. Goldblatt Partners LLP. https://goldblattpartners.com/news-events/news/post/ford-government-passes-bill-124/
Goldblatt Partners LLP. (2024, February 12). Court of Appeal upholds Bill 124 decision. Goldblatt Partners LLP. https://goldblattpartners.com/experience/notable-cases/post/court-of-appeal-upholds-bill-124-decision/
Law Times. (2021, February 14). Public-sector unions file evidence in Charter challenge of law capping compensation increases. Law Times. https://www.lawtimesnews.com/practice-areas/labour-and-employment/public-sector-unions-file-evidence-in-charter-challenge-of-law-capping-compensation-increases/337805
OPSEU SEFPO. (2021, October 19). LockTalk 2: Everything you wanted to know about Bill 124. OPSEU SEFPO. https://opseu.org/news/locktalk-2-everything-you-wanted-to-know-about-bill-124/135295/
OSSTF/FEESO. (2019, June 24). Public Sector Wage Caps—A Summary of Doug Ford’s Bill 124. OSSTF Update. https://osstfupdate.ca/2019/06/24/public-sector-wage-caps-a-summary-of-doug-fords-bill-124/
