Law Times

Law Times • April 13, 2015 Page 13 www.lawtimesnews.com Municipalities pressing hard on arbitration reform By JUdy van rhiJn For Law Times he Association of Mu- nicipalities of Ontario has been lobbying for years to reform the process whereby arbitrators step in to resolve bargaining disputes. Emergency services wages have been a major catalyst with cumu- lative increases for police, fire, and paramedic employees exceeding the consumer price index by 50 to 80 per cent. Glimmers of potential for re- form in the 2012 and 2013 bud- gets and subsequent promises that the Ministry of Labour was working on the issue led to hopes of a concrete announcement at the association's conference in February. In the meantime, mu- nicipal governments have be- come increasingly unhappy with awards that prioritize copying agreements in one community and transplanting them to an- other in apparent disregard for local financial realities. The current legislation pro- vides that the arbitration board should take the employer's fiscal position into account, but in re- cent years arbitrators have inter- preted the employer's ability to pay on the basis of a narrow focus. As a result, municipalities often agree to wage increases for emer- gency service personnel that far exceed the agreements with their other employees in order to avoid costly arbitration decisions. Association president Gary McNamara threw down the gauntlet early on at the recent conference. In his keynote speech, he called interest arbitration an is- sue municipalities aren't giving up on. "There are ways we can make the process more efficient, but the substantive issue is how to deter- mine affordability for different municipalities. What is affordable in one community may be cost prohibitive elsewhere." McNamara said he was send- ing a clear message to the province that the association is expecting future discussions on the issue. "Frankly, any possible change to the interest arbitration regime is not going to happen without a new process that involves all the parties, including the ministry." It took some prompting of the government representatives at the conference to get them to address the issue, according to association executive director Pat Vanini. "There was no specific refer- ence to the issue in the premier's speech, and it is not a mandate of the other ministers that were plenary-stage speakers." When the time for questions came, there was no dodging the issue for Labour Minister Kevin Flynn. "Will you make changes to Ontario's interest arbitration system? Will you clearly define capacity to pay?" someone asked him. His response acknowledged that interest arbitration is one part of his mandate letter from the premier. It states that one of the ministry's specific priorities is "continuing to assess options to reform the interest arbitration process." Flynn expressed a sincere de- sire to work with the parties, and Vanini now expects he'll convene a meeting with the association and employee organizations to discuss the issues. "We hope that a process for the discussions will be established soon and that we will be able to roll up our sleeves. We are preparing for discussions. We are monitoring settlements." It's a path the stakeholders have already been down. In recent years, employer and employee groups have met and exchanged proposals on what they believe interest arbitration legislation should look like. However, they were unable to come to a con- sensus with many unions strenu- ously opposing the proposed changes. They argue that giving more weight to the employer's ability to pay would diminish an arbitrator's ability to make inde- pendent decisions and suggest its capacity to do so is fully within the government's control. Vanini, speaking from the perspective of municipalities, says capacity to pay is the most important issue the parties need to resolve. She believes the public is beginning to share the associa- tion's concerns. "The public are questioning the rationale for why a settlement, either negotiated or arbitrated, in one municipality is then ap- plied in another municipality and there is no demonstration of impact or consequences on mu- nicipal budgets and taxpayers as part of the arbitrator's decision. It seems the public are now see- ing what municipal governments have been experiencing. Their tolerance for salary adjustments much higher than other public and private sector workers is be- coming increasingly negative." The association has the sup- port of the emergency services steering committee, a joint com- mittee of Ontario mayors and the Ontario Association of Police Service Boards as well as the On- tario Chamber of Commerce. In March 2014, more than 30 busi- ness executives signed onto a let- ter to the government expressing concern about the issue. "The current interest arbitration model is hurting municipalities' eco- nomic competitiveness, and ulti- mately the competitiveness of the province," they wrote. These bodies have endorsed the legislative wish list published by the municipal association. Apart from prioritizing the ca- pacity to pay, it includes stream- lining the process with a single arbitrator, a 12-month timeline for an award, and deadlines for submissions. It also includes a requirement for written reasons that explain how the arbitrator considered and evaluated the fiscal health of a community according to clear and measurable criteria similar to those used by the province for distribution of the Ontario mu- nicipal partnership fund. While the association waits for the promised talks, it's not letting the issue slip away from the pub- lic's attention. "We will continue to talk about the challenges of ca- pacity to pay," says Vanini. LT FOCUS CANADA & USA 1.800.265.8381 | EMAIL info@mckellar.com | www.mckellar.com The reason why we are Canada's largest and most comprehensive structured settlement firm has everything to do with our passion for service and performance— without exaggeration, we make life easier for you. Almost as accurate as McKellar. The world's most precise clock loses less than a second every five billion years... Untitled-2 1 2014-09-26 12:54 PM T Labour Minister Kevin Flynn has been fac- ing intense questions about the govern- ment's stance on labour arbitration.

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