Editorial: Are politics at play in arbitration reform?

With recent government budgets showing the public sector continues to be in financial difficulty, the province could have made some headway on the issue in announcing its fiscal plan last week by moving on long-sought reforms to labour arbitration.

As Law Times reported earlier this month, the Association of Municipalities of Ontario has been driving hard on the issue. It argues the system for dealing with labour relations disputes for emergency services employees such as fire, police, and paramedics is leaving municipalities in dire fiscal straights. While the province has repeatedly said it’s working on the issue, we’ve yet to see any results.

The issue also surfaced in a recent interest arbitration award involving firefighters working for the City of Cambridge. After considering the various criteria, including the employer’s ability to pay, the current economic situation in Ontario, and a comparison between firefighters and other employees, panel chairman Larry Steinberg awarded the Cambridge employees wage increases of 2.7 per cent for 2013 and 2.79 per cent for 2014.

That’s hardly an excessive increase, but as city nominee Michael Riddell noted in his dissent, the award is “completely out of step” with other public sector settlements in Ontario. In particular, he noted another union had freely negotiated an agreement providing for no salary increase for certain employees in 2013 and 1.5 per cent in 2014.

The concern, of course, is that when it comes to essential services workers like firefighters and police, the system makes it very difficult for arbitrators to award anything close to the wage freeze the province has been trying to impose across the public sector in recent years in light of all governments’ fiscal difficulties. One way to address the issue would be to refine the language in the applicable legislation to require arbitrators, as Riddell seemed to suggest should have been the case in the Cambridge matter, to focus more on settlements reached for other employees working for the same employer.

Given its current zeal for wage restraint, why hasn’t the Ontario government acted? One reason may be the very active support the provincial Liberals got from firefighters during last year’s election campaign. They certainly wouldn’t welcome any changes that would end the automatic wage escalators the current system tends to put them on.
The Liberals probably don’t want to anger a key support group, which is too bad given the financial consequences for many public sector employers.
— Glenn Kauth

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