Interim Report - Report No 311, November 1998

Case No 1943 (Canada) - Complaint date: 12-NOV-97 - Closed

Allegations: Governmental interference in arbitration and labour tribunals

1. 151. The Committee examined this case at its June 1998 meeting and presented an interim report to the Governing Body (see 310th Report, paras. 185-242, adopted by the Governing Body at its 272nd Session (June 1998)).
2. 152. The Government sent further observations in a communication dated 22 September 1998.
3. 153. Canada has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). It has not ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), or the Collective Bargaining Convention, 1981 (No. 154).

A. Previous examination of the case

1. 154. During its previous consideration of this case concerning legislation dealing with compulsory interest arbitration in specific areas of the public service, the Committee examined in particular Schedule Q to the Savings and Restructuring Act, 1996 (Bill 26); the Public Sector Dispute Resolution Act, 1997 (Schedule A to the Public Sector Transition Stability Act, 1997) (Bill 136); and the Social Contract Act, 1993 (Bill 48). The complainants alleged that the legislation and the continued absence of an independent body to appoint interest arbitrators in Ontario, interfere with the independence of interest arbitrators and the integrity of the arbitration process in contravention of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), and the Collective Bargaining Convention, 1981 (No. 154).
2. 155. The Committee made the following recommendations (see 310th Report, para. 242):
   • (a) The Committee requests the Government and the complainants to submit further information regarding the application in practice of the criteria for arbitrators set out in Bill 26 and Bill 136, in particular, to indicate whether the outcome of arbitration in fact replicates the results of free collective bargaining in a manner that both parties consider desirable.
   • (b) The Committee requests the Government to ensure in future that consultations in good faith are undertaken regarding any changes in the bargaining structure, in such circumstances that the parties have all the information necessary to make informed proposals and decisions.
   • (c) Concerning the allegation of interference with the independence of the OLRB, the Committee regrets that the Government replied in a general manner to the very specific allegations made by the complainants in this regard. Expressing serious concern as to the perceived effects on the independence of the members of the OLRB due to the external pressures brought to bear on them, the Committee requests the Government to reply to the specific allegations made in this regard, and to indicate how members are appointed, any consultation process involved, the term of such appointments, and the basis in law and in practice upon which appointments are or can be revoked or not renewed. The Committee also requests to be kept informed of the outcome of the independent adjudication of the case concerning Mr. Johnson, and requests the Government to forward to the Committee a copy of the decision once it is rendered.
   • (d) Recalling that it is essential that the arbitrator should not only be strictly impartial, but if the confidence of both sides is to be gained and maintained, he or she should also appear to be impartial, and stressing that this is all the more important in the public sector where the Government itself is one of the parties, the Committee requests the Government to provide it with information regarding the process of choosing arbitrators for appointment where the parties cannot agree on an arbitrator.
   • (e) The Committee considers that to overcome the loss of confidence of the trade unions and the other residual negative effects on industrial relations that have occurred from the recent governmental action impinging on labour relations in Ontario, the Government should consult fully with the trade unions and employers' organizations to determine how to strive to promote confidence in the arbitration, which is essential for harmonious industrial relations. The Committee requests the Government to keep it informed in this regard.
   • (f) The Committee draws this case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.

B. The Government's reply

1. 156. In its communication of 22 September 1998, the Government states with respect to the application in practice and the outcome of Bill 26 and Bill 136 criteria, that most of the awards in the mandatory interest arbitration regime have dealt with the period preceding the coming into force of these Bills. A total of 50 awards have been released under the Bills (eight in the fire services sector, 14 in the police sector and 28 in the health care sector). The Government notes that the average wage increase awarded in these cases is 1.09 per cent. It recalls that the Government's intention is that the outcomes will mirror as closely as possible those in sectors entitled to exercise the right to strike. It notes, however, that it is too early to determine conclusively whether this goal has been achieved, but it is expected that this will be the result over the medium to long term.
2. 157. With regard to the Ontario Labour Relations Board (OLRB) appointment process and the independence of the Board, the Government states that it recognizes the importance of the impartiality of public appointees and expresses its commitment to ensuring the continued credibility and neutrality of public tribunals and agencies. The Government goes on to describe the general appointment procedure for the OLRB. In general, Board vice-chairperson candidates are identified through consultations within the labour relations community, based on their qualifications, competence, impartiality and credibility. The Minister of Labour, in consultation with the chairperson of the Board, recommends the appointment of vice-chairpersons to the Premier. The Lieutenant Governor in Council appoints the vice-chairpersons through an Order in Council approved by Cabinet. The term for which Board members are appointed is at the discretion of the Lieutenant Governor, although a three-year term is commonplace. Concerning the revocation of the appointments of three of the Board vice-chairpersons, the Government indicates that this was the subject of a recent court challenge, which has been settled. The Government asks that these revocations be viewed in context, namely as part of an unprecedented downsizing of the Government and its agencies. These revocations were the result of significant budget reductions at the Ministry of Labour.
3. 158. The Government asserts that the Acting Deputy Minister of Labour in the Province of Ontario has met on several occasions with representatives of the Ontario Labour Relations Board Appointments Sub-Committee of the Canadian Bar Association Labour Law Executive, who have presented recommendations aimed at facilitating an impartial appointment process. As part of the Government's ongoing review of agencies, the Public Appointments Secretariat has been directed to undertake a review of the public appointments process for chairpersons and members of regulatory/adjudicative agencies to ensure it meets the business needs of the sector. Recommendations for a public appointments policy based upon this review are expected to be released next year.
4. 159. Concerning the complaint filed by SEIU against Mr. Johnson, the Government informs the Committee that the case was withdrawn in May 1998 and that no further legal proceedings in this matter are expected.
5. 160. On the issue of the appointment of arbitrators where the parties cannot agree on an arbitrator, the Government states that this is currently the subject of litigation before the domestic courts. As a result, it is the view of the Government that it would be inappropriate for it to offer public comment at this time, and asks that the Committee defer its consideration of this particular issue until the courts have rendered a decision. The Government notes that interest arbitrators and arbitration boards are usually agreed upon by the parties, and it is only where the parties fail to agree that a third party has the authority to make appointments. The Government states that an increasing number of parties have been choosing interest arbitrators by mutual agreement.
6. 161. Concerning the Committee's recommendation that consultations in good faith be undertaken regarding any changes in the bargaining structure, the Government expresses its support for consultation "wherever appropriate". It goes on to state, however, that the Government needs to be able to judge and determine, as circumstances vary and taking into account the context of each issue, the appropriate timing and scope of consultations; for instance, from time to time the speedy passage of legislation is imperative. In such cases, the Government remarks, consultation cannot be as broad as the Government and affected parties may desire.
7. 162. Finally, concerning the overall industrial relations climate in Ontario which had been commented upon by the Committee, the Government states that there are bound to be different points of view between the Government and organized labour as to what constitutes a proper balance in the labour relations framework. Despite these different perspectives, the Government asserts that the outcomes that have been achieved in the past few years are indicative of harmonious industrial relations in the province. The Government cites two examples in support of its contention: first, 95 per cent of collective agreement negotiations have been settled without a strike or lockout; secondly, Bill 136 issues, such as the determination of bargaining unit structure after an amalgamation of two or more broader public sector employers, are being dealt with expeditiously by the Board and in a way that is promoting negotiated settlements.

C. The Committee's conclusions

1. 163. The Committee notes that the complaint involves allegations that the legislation concerning compulsory interest arbitration in specific areas of the public service and the continued absence of an independent body to appoint interest arbitrators in Ontario, interfere with the independence of interest arbitrators and the integrity of the arbitration process in contravention of freedom of association standards and principles.
2. 164. The Committee notes the Government's statement that it is too early to determine conclusively whether the outcomes of arbitration under Bills 26 and 136 replicate those in sectors entitled to exercise the right to strike but that it is expected that this will be the result over the medium to long term. The Committee recalls its previous conclusions in this case that the compatibility with freedom of association and collective bargaining principles of the criteria to be taken into consideration by the arbitrators pursuant to the Bills depends on their application in practice. The Committee requests the Government to provide further information concerning the arbitration outcomes, and to forward copies of the relevant arbitration awards. It also repeats its request to the complainants to submit further information in this regard.
3. 165. The Committee notes that while the Government expresses its support for consultation "wherever appropriate", it does not define what it considers "appropriate", and states that consultation cannot always be as broad as the parties may desire. In particular, the Committee notes that the Government refers to the need in certain circumstances for the speedy passage of legislation. While taking note of this statement, the Committee again recalls the importance of adequate consultation where a government seeks to alter a bargaining structure in which it acts actually or indirectly as the employer, including with respect to compulsory arbitration, so that all objectives can be discussed by the parties concerned. Such consultation is to be undertaken in good faith and both parties are to have all the information necessary to make an informed decision. Noting the importance of changes in the bargaining structure, including the arbitration process, to the bargaining parties, the Committee urges the Government to ensure in future that consultations in good faith are undertaken regarding any changes to the bargaining structure, in such circumstances that the parties have all the information necessary to make informed proposals and decisions and the implementation of the legislation ultimately adopted is facilitated.
4. 166. Concerning the allegation of interference with the independence of the OLRB, the Committee, while noting the Government's statement as to the importance of the impartiality of the Board, again expresses its concern as to the perceived effects on the independence of the members of the OLRB due to external pressures brought to bear on them according to the complainants. The Committee considers that if there was in fact governmental interference, this would be a violation of freedom of association principles. The Committee further notes that the Government has provided a general description of the appointment procedure. In this regard, the Committee requests the Government to provide more specific information on the actual consultation process that is undertaken. With respect to the allegations concerning the removal of eight OLRB vice-chairpersons and the chairperson, the Committee notes that the Government in its reply makes reference to the revocation of the appointments of only three of the Board vice-chairpersons. The Committee requests the Government to provide specific information concerning all the cases referred to in the complaint, and also to inform the Committee of the basis in law and in practice upon which appointments can be revoked or not renewed. The Committee notes the Government's indication that a review of the appointment procedure is being undertaken, and the complainant's statement on the loss of confidence of the trade unions and the other residual negative effects on industrial relations that have occurred from recent governmental action impinging on labour relations. Consequently, the Committee urges the Government to make trade unions and employers' organizations an integral part of the review process since it is dealing with an area of particular importance to them.
5. 167. Concerning the Committee's request for information regarding the process of choosing arbitrators for appointment where the parties cannot agree on an arbitrator, the Committee notes the Government's request that consideration of this issue be deferred since it is presently the subject of litigation. The Committee requests the Government to forward a copy of the decision of the court in this matter as soon as it is rendered.
6. 168. With respect to the overall industrial relations climate in Ontario, the Committee, while noting the Government's statement that there are bound to be different points of view as to what constitutes a balance in the labour relations framework and that outcomes that have been achieved recently are indicative of harmonious industrial relations, recalls its observations during the previous examination of this case, concerning the factors impinging on the industrial relations environment:
   • The Committee cannot but remark on the fact that after three years of statutorily imposed wage restraint in the public sector through the Social Contract Act, changes have been made to the compulsory arbitration system without full consultation with the parties concerned. In addition, as addressed recently in Case No. 1900 (see 308th Report, paras. 139-194), agricultural workers, domestic workers and certain specified professions have been excluded from access to collective bargaining and the right to strike through legislation, and legislation concerning successor rights has been repealed. In addition, there was an attempt to repeal important pay equity provisions (see 310th Report, para. 241).
   • The Committee is obliged to repeat its conclusion that such restrictions can, in the long term, prove harmful to and destabilize labour relations. The Committee also notes that, by definition, harmonious industrial relations cannot be said to exist where one of the parties has lost confidence in the system. The Committee regrets that the Government has not responded to its recommendation to consult fully with the trade unions and employers' organizations to determine how to strive to promote confidence in arbitration, which is essential for harmonious industrial relations, and urges it to do so in the near future. It requests the Government to keep it informed in this regard.

The Committee's recommendations

1. 169. In the light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to provide further information concerning the arbitration outcomes pursuant to Bill 26 and Bill 136, including whether these outcomes replicate those in sectors entitled to the right to strike. The Committee further requests the Government to forward copies of the relevant arbitration awards. It also repeats its request to the complainants to submit further information in this regard.
   • (b) Noting the importance of changes in the bargaining structure, including the arbitration process, to the bargaining parties, the Committee urges the Government to ensure in future that consultations in good faith are undertaken regarding any changes to the bargaining structure, in such circumstances that the parties have all the information necessary to make informed proposals and decisions, and the implementation of the legislation ultimately adopted is facilitated.
   • (c) Concerning the appointment procedure for members of the OLRB, the Committee requests the Government to provide more specific information on the actual consultation process that is undertaken. The Committee also requests the Government to provide specific information on all the cases concerning the removal of OLRB vice-chairpersons and the chairperson raised in the complaint, and to inform it of the basis in law and in practice upon which appointments can be revoked or not renewed. The Committee also urges the Government to make trade unions and employers' organizations an integral part of the process of reviewing the appointment procedure, since it is dealing with an area of particular importance to them.
   • (d) Concerning the process of choosing arbitrators for appointment where the parties cannot agree on an arbitrator, the Committee notes that this matter is presently the subject of litigation, and requests the Government to forward a copy of the decision of the court in this matter as soon as it is rendered.
   • (e) Regretting that the Government has not responded to its recommendation to consult fully with the trade unions and employers' organizations to determine how to strive to promote confidence in arbitration, which is essential to harmonious industrial relations, the Committee urges the Government to do so in the near future, and to keep it informed in this regard.