The Public Sector Compensation Restraint to Protect Public Services Act, 2010

The Ontario budget brought down by the Liberal government yesterday afternoon introduces a new piece of legislation aimed at restraining compensation increases for MPP’s, the Ontario Public Service, and transfer partners in the broader public sector, for a period of two years.  The legislation will cover Ontario’s universities, and will have an impact on collective bargaining for our member associations. The draft legislation in not yet available, so the only details we have on the intent of the legislation is the text of the budget documents, as well as a backgrounder and the answers we received to our questions during the budget lock-up yesterday.

The Act will freeze compensation structures of non-bargaining employees in the broader public sector for a period of two years.  The intent of the government appears to be to define “non-bargaining” to include only those employees not covered by any kind of a bargained agreement.  Assurances were given to the OCUFA representatives during the budget lock-up that the two year compensation freeze
will not apply to any of our members.   The freeze will apply to compensation structures, including base pay, merit pay, time off such as vacation, health and other benefits, but it does not freeze individual salaries.  Employees will still be entitled to normal career progress increments, for example.

The second part of the legislation will deal with employees covered by a bargaining agreement.  Existing agreements will be unaffected by the legislation; as well, there will be no legislated freeze on compensation in renewal agreements.  The government will “work with transfer payment partners and bargaining agents to seek agreements of at least two years’ duration that do not include net compensation increases”.   The government will create a Public Sector Compensation Restraint Board, which will have the authority to determine which employees or employers are covered by the legislation.

The goal of the second part of the legislation appears to be to use moral suasion to encourage compensation restraint in the bargained sector, rather than legislation.  Obviously, the employers will try to insist that they must freeze compensation as the government’s dictates, but there is no real hammer in this bill to make that happen. The budget notes that the fiscal plan provides no funding for compensation increases for future collective agreements, however in the university sector, we have never received dedicated compensation funding.  While there is no doubt that this legislation will make for several years of difficult bargaining, there is no change to the legislated rules for collective bargaining.

There is a FAQ on the legislation here:  FAQ on Public Sector Restraint Act

The legislation comes into effect as of March 25, 2010.  OCUFA will obviously be seeking more clarity from the government on its intentions with respect to collective agreements, as well as written affirmation of  the definition of “non-bargaining employees”.  Over the next few days, we will be providing an analysis of the other aspects of the budget and impending tuition framework announcement which affect our members.

All the best,

Donna Gray
Research Director, OCUFA
83 Yonge St. Suite 300
Toronto ON M5C 1S8
office (416) 306-6038
cell (416) 647-339-7840

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