reform of the conduct and structure of labour relations in ...mir.queensu.ca/default/assets/file/(2)...

REFORM OF THE CONDUCT AND STRUCTURE OF LABOUR RELATIONS IN THE ONTARIO BROADER PUBLIC SERVICE / 1

Reform of the Conduct and Structure of Labour Relations in the Ontario Broader Public Service

Richard P. Chaykowski and Robert S. Hickey

Report to the Commission on the Reform of Ontario’s Public Services

2 / REFORM OF THE CONDUCT AND STRUCTURE OF LABOUR RELATIONS IN THE ONTARIO BROADER PUBLIC SERVICE

Library and Archives Canada Cataloguing in Publication

Chaykowski, Richard P. (Richard Paul), 1958-

Reform of the conduct and structure of labour relations in

the Ontario broader public service : report to the Commission

on the Reform of Ontario’s Public Service / Richard P.

Chaykowski and Robert S. Hickey.

(Industrial relations series)

Includes bibliographical references.

ISBN 978-1-55339-321-4

1. Employee-management relations in government--Ontario.

2. Civil service reform--Ontario. 3. Labor policy--Ontario.

4. Collective bargaining--Government employees--Ontario.

I. Hickey, Robert Sean, 1969- II. Queen’s University (Kingston,

Ont.). School of Policy Studies III. Commission on the Reform of

Ontario’s Public Services IV. Title. V. Series: Industrial relations

series (Kingston, Ont.)

HD8005.2.C23O67 2012 331.7’9509713 C2012-901468-0


Acknowledgements

Funding for the research project and report was provided by the Province of Ontario. The authors gratefully acknowledge the financial support from the Province of Ontario.

The authors also gratefully acknowledge the benefit of comments and perspectives on the issues addressed in this Report by the participants in the Roundtable on Potential for Reform of the Conduct and Structure of Labour Relations in the Ontario Broader Public Service (BPS), hosted by the authors and the School of Policy Studies, Queen’s University in September 2011.

Responsibility

The original Report was submitted to the Ontario Commission on the Reform of Ontario’s Public Services in late 2011. This published version contains editorial and clarification changes.

The views and conclusions expressed in this Report are solely those of the authors and do not necessarily reflect those of the Province of Ontario.


Contents

Executive Summary 5

Section 1:Introduction 11

Section 2:Collective Bargaining and Wage Determination in the BPS 14

Section 3Labour Relations and Interest Arbitration in the BPS 35

Section 4:Collective Bargaining Structures in the Ontario BPS 64

Section 5:Government Reform of the BPS, Labour Policy, and the Law 90

Section 6:Successor Rights in the Unionized Sector of the BPS 94

Section 7:Organizational Effectiveness and Productivity in the BPS 98

Appendix A:Mandated Criteria for Interest Arbitration Awards inOntario Legislation 108

Appendix B:Research Studies Related to HRM and WorkplacePractices, and Organization Performance 111

Appendix C:Source Document 114

Appendix D: Summary of Key Specific Issues and Conclusions 131


Executive Summary

Introduction

This Report considers whether or not there are potential reforms to the industrial relations system in the broader Ontario public sector that would support cost effective operations and efficiencies that would contribute to provincial deficit reduction while preserving or even enhancing the delivery of education and health care services. The Report considers both short-term as well as potentially longer-term, more fundamental adjustments to the industrial relations system that would enhance the overall efficiency and cost effectiveness of operations and service delivery.

The particular set of industrial relations policy issues to be addressed in the Report was defined by the Commission. The Report considers specific issues concerning the functioning of the current system of industrial relations, including the structure of collective bargaining, successor rights, and compensation determination (e.g., interest arbitration). Consideration is also given to whether or not there are alternative approaches or models for the structure of collective bargaining, and processes or approaches to determining collective bargaining outcomes, such as wages and benefits, that would provide more efficient and cost-effective outcomes.

It is important to emphasize that some of the conclusions could be implemented directly, while others would need to be implemented through a process that includes multi-stakeholder consultation and the establishment of working committees with precise mandates. The conclusions and recommendations identify the outcomes.


Summary of Main Conclusions Organized by Section

Section 2: Collective Bargaining and Wage Determination in the BPS

The government should commit to:

1. The provision for resources sufficient to collect and disseminate

economic, labour market, and related industrial relations data in

support of the conduct of effective collective bargaining.

2. Establish a single Labour Relations Information Bureau to sys-

tematically collect and disseminate the range of data and infor-

mation relevant to employers and unions in their negotiations;

and identify to data and other information/knowledge gaps. Of

particular importance is developing data and measures of pro-

ductivity.

3. Provide funds, through the Bureau, to support research on tar-

geted areas of significant relevance to the collective bargaining

process (e.g., the existence/magnitude of private-public sector

pay differentials; and the factors that account for pay differen-

tials; productivity studies).

4. Undertake a comprehensive review of non-collectively bargained

pay-setting mechanisms and compensation practices in the BPS

(as examples, variable, merit and bonus pay practices; and pay-

setting mechanisms for executives, government-appointed office-

holders) with a view to ensuring that compensation is aligned

with objective economic criteria and outcomes (e.g., productiv-

ity; quality).

1 Refer to the conclusions to each section for further detail.


Section 3: Labour Relations and Interest Arbitration in the BPS

One of the main themes of this report is that the arbitration system needs to be operated at arms-length from the parties, shifted in fa-vour of more objective analysis, based upon objective criteria, and supported by systematic data and research. The interest arbitration process can be made more efficient and be better aligned with the broader public interest by implementing complementary systemic reforms across the BPS by:

1. Requiring Objective Criteria (e.g., economic factors) that inter-

est arbitrators would be required to account for in formulating

their awards/decisions.

2. Enhancing Accountability by modifying the sections in the rel-

evant labour relations legislation in the BPS to create account-

ability by specifying that arbitrators be required to provide clear

assessments and reasons for the decision that are based upon the

criteria specified in the legislation, as well as any others.

3. Ensuring Independence by creating an arms-length arbitrator

assignment process guaranteed by the government and by sup-

porting the professionalization of the mediation and arbitration

profession. This would include:

i. New legislation in the form of an Ontario Public Services Arbitra-tion and Mediation Act (PSAMA).

The PSAMA would provide for the establishment of an inde-

pendent Commission (a BPS Public Service Dispute Resolution

Commission) with:

• Responsibility for all BPS industries and structured with

staffed and resourced sections (that would replace existing

commissions) to specialize as needed in particular sub-

industries;

1 Re Oil, Chemical and Atomic Workers International Union, Local 16-14 and Polymer Corporation Ltd. (1959), 10 L.A.C. 51 (per Laskin, Dubin, O’Brien), aff’d 26 D.L.R. (2d) 609 (Ont. H.C.J.).

2 (1995), 2 S.C.R. 929, 125 D.L.R. (4th) 583 (S.C.C.).


• Responsibility to create, maintain, and manage a roster of

independent arbitrators (mediators);

• Arbitrators (mediators) to be assigned to dispute cases by the

Tribunal/Commission independently of the parties;

• Arbitrators (mediators) assignments to be coordinated

across the BPS; this could include provision for appointment

of arbitrators across sectors in the BPS;

• Mediator and arbitrator assignments to be made in a timely

and efficient manner.

• Proactive monitoring of interest arbitration awards to ensure

that awards reflect mandated criteria and the requirement to

provide fulsome reasons; and

• Ensuring transparency with the public by publishing awards

electronically.

ii.Dedicated resources to increase the professionalization of the

arbitration and mediation roles, including training and develop-

ment, and support for the creation of a formal Code of Ethics for

arbitrators and mediators.

4. Creating and Maintaining Data Resources.

Section 4: Collective Bargaining Structures in the Ontario BPS

1 The Ministry of Government Services and the Ministry of Labour

should lead a multi-stakeholder review of bargaining structures

with a view towards increasing the level of coordination and cen-

tralization.

2. Government should empower this multi-stakeholder task force

to create tripartite committees in each segment of the BPS with

well-defined terms of reference, mandate, scope, and process.

3. Establish transparent and accountable roles for government in

the coordinated bargaining systems based on the principle of

engagement.

4. Establish, through legislation, mechanisms to support coordi-


nation across the BPS and align multi-stakeholder centralized

bargaining with centrally funded segments of the BPS.

5. Establish, through legislation, mechanisms to enable and sup-

port employer and union associations. Legislation or similar

policy tools are needed to overcome the lack of authority that

the voluntary associations currently face.

Section 5: Government Reform of the BPS, Labour Policy, and the Law

1 The recent SCC decisions in BC Health Services and Fraser do hold

government actions to a set of standards and, therefore, con-

straints that would affect the reform, or change, process and, in

some cases, may limit the extent of change or re-structuring.

2. The government is not prevented from pursuing a policy program

of change. The government is, however, required to meet sev-

eral process burdens and there is no “bright line test” of whether

or not any given process of consultation and negotiation over

change would meet the new requirements.

3. It is reasonable to expect that any process of reform, including

one that took the form outlined above, would be subject to a

court challenge; but that is not to imply that governments ought

not to actively pursue reforms.

Section 6: Successor Rights in the Unionized Sector of the BPS

1 Successor rights constrain the government, as employer, in rela-

tion to activities related to the transfer of an undertaking (and

related employees). The constraint affects both the process

undertaken as well as some types of outcomes, related to labour

relations.

2. Respecting orderly succession rights and existing obligations is

aligned with the government’s interest in maintaining continuity

in service provision.


3. The existence of any constraints does not imply that the govern-

ment, as employer, cannot successfully negotiate and complete

meaningful structural changes in its operations.

Section 7: Organizational Effectiveness and Productivity in the BPS

1 Achieving improvements in organizational effectiveness and

productivity across the BPS through a “top-down” approach that

is driven centrally is highly unlikely to meet with any success given

the sheer size and complexity of the entire BPS.

2. Government-supported reform of public sector management

and HRM practices, and of labour relations (LR) practices, re-

quires a comprehensive strategy that:

• Sets out common global objectives to be achieved across organi-

zations.

• Supports the development of objectives, and strategies to achieve

those objectives, that are more specific to organizations/sectors

with unique requirements.

• Requires that organizations develop metrics/benchmarks in

order to measure progress.

• Creates an HRM/LR investment pool that provides targeted

resources to support organizations.

• Establishes a BPS Centre of Management Excellence with overall

oversight and authority for the reform of public sector manage-

ment.


Section 1:

Introduction

A well-functioning system of industrial relations in the Ontario broader public sector is critical to achieving outcomes that serve and advance the interests of the employees and their unions, and employers. The outcomes of the industrial relations system must, nevertheless, also serve the broader public interest.

The Ontario government is facing a particularly challenging period of time as a consequence of the combination of a high deficit and ac-cumulated debt, slow economic growth, and rising costs in key publicly funded sectors, including health and education (Dodge 2010). The conduct and outcomes of industrial relations (i.e., labour-manage-ment relations) are crucial in terms of their potential to impact costs and productivity in these sectors.

One important development, for example, has been that bargain-ing practices and government policy have increased the incidence of coordinated and centralized bargaining structures in Ontario’s Broader Public Sector (BPS). The types of bargaining structures in place have important implications for the interactions of stakehold-ers as well as economic and operational outcomes. In the Ontario BPS, where the government functions as the funder, but where the delivery of public services are contracted with third-party providers, such bargaining coordination has significant policy implications in terms of collective bargaining outcomes and the costs of collective bargaining settlements. In addition, centralized bargaining structures, including more informal discussion tables, create venues for tripartite discussions.

Another key issue relates to concern over the patterning of monetary outcomes across interest arbitrations that could result in a systemic upward bias to wage settlements. Consequently, the current function-ing and role of interest arbitration can have a major impact on labour costs across the BPS.


This Report considers whether or not there are potential reforms to the industrial relations system in the broader Ontario public sector that would support cost effective operations and efficiencies that would contribute to provincial deficit reduction while preserving or even enhancing the delivery of education and health care services. The Report considers both short-term as well as potentially longer-term, more fundamental adjustments to the industrial relations system that would enhance the overall efficiency and cost effectiveness of operations and service delivery.

The Report considers specific issues concerning the functioning of the current system of industrial relations, including the structure of collective bargaining, successor rights, and compensation determina-tion (e.g., interest arbitration). Consideration is also given to whether or not there are alternative approaches or models for the structure of collective bargaining, and processes or approaches to determining collective bargaining outcomes, such as wages and benefits, that would provide more efficient and cost-effective outcomes.

The research Report focuses on the following particular industrial relations policy issues:

1. Are there alternatives to the current processes in the industrial

relations system in the BPS that would support lower (unit)

labour cost increases, including alternative approaches to settle-

ments and interest arbitration?

• The Report considers the bargaining process; methods of

dispute resolution; and the role and scope of issues within the

purview of interest arbitrators in Ontario.

2. Are there structural issues (e.g., successor rights) that would

impact the objective of achieving fiscal restraint?

• The Report considers whether policy initiatives to reconfigure

the structure and processes of labour relations, or reforms

that would lead to greater fiscal efficiencies, may be impeded

by structural factors such as successor rights.


3. Are there specific alternatives to the current collective bargain-

ing structures in the Ontario BPS, including the structure of

collective bargaining units, and the degree of employer coordi-

nation in collective bargaining, that affect bargaining outcomes

in Ontario? Would alternative structures and approaches yield

systemically lower wage increases? If so, what specific structures

would be required?

• The Report assesses whether or not the current bargaining

structures would tend to result in systemically higher wage

increases.

• Experimentation with coordinated bargaining structures,

including tripartite arrangements, is not unique to Canada

There is a well-established literature in the field of industrial

relations which examines collective bargaining structures,

including the determinants, processes, and factors associated

with a range of negotiated outcomes. Given the existing trends

towards coordinated bargaining structures in Ontario’s BPS,

the research project would investigate the experiences and

evidence on the effects of alternative bargaining structures and

approaches to employer coordination in bargaining, from

other jurisdictions, to assess whether there are more efficient

alternatives to the systems currently in place in the Ontario

BPS.

4. Are there alternatives to the current structure and/or processes

of the industrial relations system in the BPS that would support

lower wage increases and increase efficiency?

• The Report considers this overarching issue, throughout,

integrating the analysis and policy recommendations resulting

from issues 1 through 3 above.

Reforms to the industrial relations system in the BPS can create better alignment between industrial relations outcomes and the public interest. Broader reforms of Ontario’s public services can be ad-vanced by improving the functioning of the labour relations system itself and by supporting the development of strong relationships between employers and unions, across BPS industries.


Section 2:

Collective Bargaining and Wage Determination in the BPS

2.1 Labour Markets and Wage Determination in the Ontario BPS

2.1.1 Pay and Productivity

Economic theory makes clear that employee wages are determined by the interaction of the demand for labour services by employers and the supply of labour services offered by workers. Even so, wage levels and growth are affected as well by a variety of important institutional and other factors including:

• wage structure that include wage/salary progression

mechanisms;

• unions and the process of collective bargaining, and interest

arbitration;

• legal contexts that may place constraints on the types of con-

tracts, or re-contracting, or terms and conditions of employment;

and

• policy and legislative frameworks that set standards or determine

processes for wage determination.2

While institutional factors may dominate economic factors, especially in the short term, in the long term we expect wage growth must be sustained by productivity growth if living standards are to rise:3

2 See Ehrenberg, Smith and Chaykowski (2004).3 In competitive markets, in private sector, employees’ wages are associated

with the marginal product of labour in the short run:


“Productivity is by far the most important driver of living standards for Canadians. This is because real income can only increase in the long run if more real output is produced. While increased productiv-ity growth is generally associated with higher wages, it also brings to life a new world of possibilities for Canadians. Higher productivity means that Canadians will be able to meet the fiscal pressures as-sociated with an aging population. It means the possibility of more health care funding. It means that workers will have the option of benefiting from increased leisure. In short, productivity growth is vital to the economic success of Canadians. From this perspective, Canada’s weak productivity performance since 2000 represents a massive shortfall.” Sharpe (2010: 10-11)

The basic principle underlying the case for nominal wage/salary increases is that the amount of the increase:

• Be sufficient to preserve real wages (nominal wages adjusted for

inflation) in order to protect employees’ real purchasing power;

• Correspond (at least approximately) with increases in labour

productivity; this reflects the requirement that over the medium

to longer term, wage increases can only be supported, or sus-

tained, by increases in labour productivity if economic efficiency

is to be achieved.

• “Structural” pay increases, associated with progress-through-the-

ranks, for example, are deemed to be justified on the basis of the

increased productivity associated with the employees’ enhanced

positions. Such employees may require greater knowledge, skills

and training, and responsibility, and take decisions that have a

greater impact on organizational effectiveness (hence, on pro-

ductivity).

“Thus, the real wage rate that the firm pays … also has the dimension units of output per unit of labor.” (Original emphasis) (Ehrenberg and Smith (1994: 64)).

Baldwin and Gu (2009) discuss the importance of productivity and the connection between compensation increases and growth in labour productivity.

2.1.2 Pay Determination in the Public Sector and Labour Relations

Wage determination and costs and labour relations outcomes in the Ontario public sector are determined, variously, by three broad sets of factors including the:

1. Unique characteristics of public sector labour markets;

2. High degree of unionization and employment growth in the

Ontario BPS;

3. Important role of interest arbitration in wage determination in

the Ontario BPS.

Each of these factors is considered in turn.

1. Unique characteristics of public sector labour markets.

Public sector labour markets function differently than do private sec-tor labour markets because of several differentiating characteristics:

(i) Public sector employers are not profit-maximizers.

Most of the services provided by public sector industries, such as health, social services, emergency and security, education and public administration of government, are considered to a large extent to be a “public good.” Consequently, where governments provide services directly, or where service providers are largely funded by government, the providers tend to have some monopoly power in the provision of those services. Across Ontario BPS industries, there is a spectrum in terms of the mix of “public” versus “private” provision of services within the “envelope” of services associated with the BPS; but the overarching characteristic of the BPS relates to government provision of services, either directly or indirectly.

The government’s interest is in maximizing the provision (and dis-tribution) of services subject to some minimal quality standard and to budgetary constraints. The issue of the extent to which there exist “actual” budgetary constraints in certain BPS industries is of central importance in labour relations and is subject to intense debate; espe-cially in the short run because government’s are sometimes viewed as having a high capacity to raise revenue through either borrowing or increases in immediate taxation (e.g., health care premiums or levies).

The issue of whether or not the government confronts any meaningful budget constraint is of critical importance because it relates directly to the issue of “ability to pay” of BPS employers in collective bargaining and interest arbitration; we take up this issue below when we consider the interest arbitration process.

(ii) Many of the services provided in BPS industries are considered “essential” insofar as the withholding of the provision of the services would materially affect the health and/or security of the public.

The common cases of essential services include health care, long-term care, policing, and firefighting; non-essential services might include recreational services or standard road maintenance.

The key industrial relations issues are two-fold:

1st: To the extent that a particular service is essential to the public, then the demand for the service would tend not to vary considerably with changes (within a reasonable range) in price (i.e., the “price elas-ticity of demand” for the service is highly “inelastic”). Consequently, increases in the price of services brought about by increases in labour costs would not tend to create great pressures to reduce employment levels, even in labour intensive industries.4

Labour demand in many Ontario BPS industries are expected to be, to at least some extent, inelastic. 5

4 Technically, other things being equal, the own-wage elasticity of the demand for labour would tend to be lower when the price elasticity of demand for the service being consumed is low [see Ehrenberg, Smith and Chaykowski (2004: 101)].

5 Although there is a dearth of Canadian research evidence regarding the degree of wage elasticity of demand for labour in the public sector is quite limited, empirical evidence for the United States suggests inelastic wage elasticities of demand for labour in the public sector.

See the definitive review of public sector labour markets by Ehrenberg and Schwartz (1986: 1257, Table 22.5); however, these measured public sector elasticities are not “substantially lower” than estimates for the private sector (Ehrenberg and Schwartz (1986: 1256).

To the extent that unions are successful in raising wages, this inelastic-ity would operate in favour of sustaining employment levels of union-ized workforces; that is, unions would be less constrained in seeking wage increases by the prospect of employment losses than would be unions in the private sector:

“Government does not generally sell a product the demand for which is closely related to price. There usually are not close substi-tutes for the products and services provided by government and the demand for them is relatively inelastic. Such market conditions are favorable to unions in the private sector because they permit the acquisition of benefits without the penalty of unemployment, subject to the restraint of nonunion competitors, actual or potential. But no such restraint limits the demands of public employee unions. Because much government activity is, and must be, a monopoly, product competition, nonunion or otherwise, does not exert a downward pressure on prices and wages.” Wellington and Winter (1971:18-19)

The net result is that the extent of essentiality and of price elasticity, together, operates to sustain both higher wages and employment levels than otherwise, which would result in a higher wage/salary bill.

2nd: In labour relations, the main issue is identifying which industries/employers provide essential services and what proportion of a given workforce ought to be deemed essential. This issue determines the right to strike or, in the case of enterprises where only a portion of the workforce is designated as essential, whether a strike by remain-ing employees would have any meaningful impact on the operations of the employer.

We note that the issue declaring employees as essential is highly contentious (including the scope of the application of the essential services designation across employees in a workforce; and the weight that ought to be given economic criteria in the decision to designate workers or to order employees back to work). In the current climate, BPS employers are under pressures and have unique incentives to rely on designating employees as essential; just as unions and employees are wary of the tendency to invoke this rationale for limiting the right to strike.

The issue of designating employees as essential is critically important and has re-emerged as a contentious issue. The government therefore ought to invest in an up-to-date, independent analysis of the concerns, problems and potential solutions to this critical industrial relations issue.

2. High Degree of Unionization and Employment Growth in the Ontario BPS.

The extension of legislation that established the right of employees in broader public sector industries to be represented by unions and exercise collective bargaining at both the federal and provincial levels during the 1960s and 1970s created the basis for the rapid expansion of unionization throughout broader public sector industries.6 By the mid-1980s, union density in Ontario BPS industries greatly exceeded the level of unionization in the private sector; by 1985, union density was about 38.6% in Health and Social Services, 67.6% in Education, and 79.4% in Provincial Public Administration.7

Union density rates in major Ontario BPS segments, as well as the over-all union density rate in Ontario, and in Ontario manufacturing, are presented in Figure 1 for the period from 1997 – 2010.8 Overall union density in Ontario has leveled off at approximately 28%; similarly, union density has leveled off in each major BPS segment – at about 45-47% in Health and Social Services; at about 69-70% in Education; and at about 73-74% in public administration. These very high levels of union density in BPS segments compare to a union density level of about only 20% in Ontario manufacturing, by 2010; and, whereas density levels have recently been in decline in manufacturing, they remain stable in Ontario BPS industries. The extent of unionization in the Ontario BPS is, therefore, very significant relative to other sec-tors; for example, in 2005, union density in the Ontario private sector was far lower at only about 17.5%.9

These aggregate estimates of union density in broad BPS segments can mask important variations in density across sub-industries. For

6 Source: Rose (1995: 21-22).7 Source: Rose (1995: 30, Table 3).8 Source data for Figure 1: Statistics Canada, CANSIM.9 Source: Statistics Canada. 2006. “Unionization.” Perspectives on Labour and

Income. (August). p. 31, Table 2B.


example, while overall union density in the Health and Social Services segment is estimated at about 45-47%, some estimates place union density in hospitals and acute care at about 75%, at about 87% in child welfare agencies, and about 24% in youth justice service agencies. Similarly, while the OPP are considered employees of the Government of Ontario, all officers are covered by two bargaining units under the Ontario Provincial Police Association; and Municipal Police As-sociations are not formal unions, but all officers are covered by them, across the province. Alternatively, the long-term care industry, which has a large number of private enterprises, also has a very high union density rate of about 80%. (Refer to Chart 1.)

Employment in the Ontario BPS has increased steadily in the past two decades across the major BPS sectors/industries, including Education, Health and Social Services, and Public Administration; from 1989 through to about 1993, employment increased in these broad industries, and then leveled off through the 1990s; thereafter, employment levels increased at first modestly in Education, and in Public Administration, before increasing rapidly after about 2005; while the increase in employment in Health and Social Services was quite significant from the end of the 1990s onward.

Over the period from 2000 to 2008, employment increased by ap-proximately 29% in Health and Social Services and by 31% in Educa-tion. By 2008, Ontario BPS employment accounted for one quarter of total service sector employment and approximately 19% of total employment in Ontario.10

Figure 2 displays the patterns of employment growth in Education, Health and Social Assistance, and Public Administration in Ontario over the period from 1989 – 2008 (employment on the left-hand scale;11 and Figure 2 also presents information over an extended pe-riod for wage changes (right hand scale) including the:12

10 Sources: 1999 Ontario Economic Outlook and Fiscal Review. 1999. Ontario: Ministry of Finance. pp. 96,97, Table 26; and 2009 Ontario Economic Outlook and Fiscal Review Economic Data Tables. 2009. Ontario: Ministry of Finance. Tables 23 and 29.

11 For the data sources for Figure 2 refer to Appendix C: Source Document, Section 1 on “Economic and Labour Market Data.”

12 Note that these wage settlements are based upon larger contracts.


(i)percentage wage increase in collectively bargained settlements in

the Ontario BPS; and

(ii)annual difference in the percentage wage increase in collective-

ly bargained settlements in the Ontario BPS versus the private

sector.

Importantly, the recent extended period of employment growth (i.e., since the late 1990s) across BPS industries is coincident with a period of high wage growth.13

The combination of employment growth and high wage increases results in a rapidly growing aggregate wage/salary mass.

We expect that wage settlements in the BPS to set a pattern for non-unionized BPS employees, as well as for exempt employees. To the extent that this has occurred, it would result in even further increases in the aggregate wage/salary costs for the Ontario BPS. Since many benefits are linked to wage levels, aggregate compensation costs would also increase.

13 The solid lines represent trend lines with the formula (both 3rd order polynomials with R2 of about .5) displayed in the top and bottom left-hand corners, respectively.


3. Important Role of Interest Arbitration in Wage Determination in the BPS.

In Ontario BPS industries, the wages of unionized employees are determined through either: (i) collective bargaining with the right to strike; or (ii) by some combination of collective bargaining and interest arbitration. The labour relations regimes in each Ontario BPS industry is set out in the relevant labour relations legislation for a given industry or occupation. The range of applicable legislation across selected Ontario BPS industries is presented in Chart 1, includ-ing a synopsis of the dispute resolution option available.

Given the very high overall level of unionization across BPS industries, the overwhelming majority of employees have their wages determined through either process (i) or (ii) above; and therefore binding arbi-tration assumes a critical role in wage determination.

Whether or not wages in highly unionized (sub-) industries are de-termined by collective bargaining with the right to strike/lockout, where permitted by legislation, or through interest arbitration, we expect the wage determination process to be influenced by a variety of such factors as the financial state of the enterprises, inflation rates, changes in productivity, changes in job responsibilities, and so forth. Given the high level of unionization in the BPS we expect:

(a)Unions to pattern settlements after recent settlements in other

sets of negotiations; and

(b)The pay levels of both nonunionized employees in the BPS, as

well as management employees, to be influenced by collective

bargaining settlements; this would occur in order to maintain

parity/differentials across workers.

Wage determination processes are therefore not expected to be independent of other (previous) settlements, in a given industry or even across industries, that were generated through wither collective bargaining and/or interest arbitration.


Interest arbitration is a key feature of the wage determination process across Ontario BPS industries. Interest arbitration is used extensively, it directly affects a large proportion of BPS employees, and it has strong potential to set wage patterns for other unionized workers who normally do not utilize the interest arbitration process – thereby affecting wages of nonunionized employees because of the maintenance of pay differ-ences across groups.

The role and functioning of interest arbitration is, therefore, a major focus of our assessment of labour relations in the Ontario BPS.

2.2 Wage Determination and Levels in the Unionized Segment of the BPS

2.2.1 Wage Determination and Union Density

The capacity of unions to raise wages in a given industry is dependent, among other factors, upon the extent to which they can successfully “take wages out of competition” from typically lower cost nonunion workers, by organizing a sufficiently high proportion of workers in that industry. Essentially, by organizing a high proportion of workers in an industry, unions can limit the substitution possibilities between enterprises that provide services with relatively higher cost unionized workers toward enterprises that employ lower cost nonunionized workers:

“The impact of unions on wages is likely to depend on the extent to which they organize workers in the relevant product market. As the organization in a market increases, the opportunity for substi-tuting nonunion for union products will be reduced, lowering the elasticity of demand for organized workers and the potential loss of employment for a given wage increase. As a result, the wages of union workers are likely to be higher, all else the same, the greater the percentage organized.” Freeman and Medoff (1981: 561)

Ontario BPS industries are very highly organized; consequently, the potential for substitution of the production of services and employ-


ment toward nonunionized enterprises is virtually nonexistent in many industries (such as health and related industries, or education); and very minimal in others (such as children and youth services, or nursing homes).

Unions in the Ontario BPS are expected to be generally less con-strained in demands for wage increases, relative to unions in the private sector, because of the combined effects of the price inelasticity of labour demand for various services – that would limit the potential for employment losses arising from escalating labour costs – and the high degree of unionization which limits nonunion competition.

2.2.2 Unionization and the Wage Advantage in the Provincial Public Sector

Pay Differences Across Workers

Differences in pay across workers have been found in a variety of labour market studies to vary according to a wide range of character-istics, including differences in:14

• personal attributes that may be associated with productivity (e.g.,

age; education; skills levels);

• other personal characteristics (e.g., gender; race);

• sector/industry and employer size;

• region and jurisdiction;

• institutional factors (e.g., whether or not employees have the

benefit of pay equity legislation); and unionization, among other

factors.

There is a large body of empirical research evidence on the relative role and importance of these factors in the determination of wage/pay outcomes.

14 Refer to Ehrenberg, Smith and Chaykowski (2004).


Union-Nonunion Pay Differentials

There is also an extensive body of research that has investigated and estimated the magnitude of the pay advantage of unionized workers relative to nonunionized employees and that controls for the many other factors that account for pay differences across workers. That is, the research has provided estimates of the “wage advantage” associ-ated with being unionized.15

Public-Private Pay Differentials

Two specific issues that have been investigated empirically include: first, whether or not there is a persistent public-private pay difference over time; and second, if there is a public-private pay differential, what factors give rise to it?16 The Gunderson et al (2000) review and em-pirical study of public-private pay differences for Canada concludes:

(i) There is a substantial and ongoing public sector pay advantage relative to the private sector, at all levels of government, including at the provincial level:

“The common thread of these results is that governments as em-ployers tend to pay wage premiums whether they are in the public administration sector or in the broader public sector where private employers also exist. That is, government wages on average are estimated to be in the neighborhood of 9 percent higher than in the private sector, with little difference across the three levels of government. If anything, this government pay ‘premium’ may be slightly lower at the federal level (8.5 percent) and slightly higher at the provincial level (10 percent)…” (Gunderson et al 2000: p.iii)

(ii) A variety of factors contribute to the public sector wage advantage:

15 Refer to the reviews by Chaykowski and Slotsve (1996) and Renaud (1997) for Canada; and to Fang and Verma (2002) for recent evidence for Canada; and to Lewis (1988;; 1986; 1963) and Blanchflower and Bryson (2003) for the U.S.; and Blanchflower and Bryson (2003) for the UK.

16 Canadian empirical studies on the public sector wage advantage, relative to private sector workers, is provided various studies, notably Gunderson (1979) and Shapiro and Stelcner (1989).


“A combination of factors explains government-private sector pay differences. Notable in this regard are pay equity policies, which narrow the male-female pay differentials in government, and the tendency for governments to pay more than the private sector does for service jobs and less than the private sector wage rates

for managers. In other words, the spread between the top and the bottom of the pay scale is less in government than in the private sector, likely a result of political, public and collective bargaining pressures.” Gunderson et al (2000: iv)

(iii) The high degree of unionization in Canadian public sector in-dustries and the associated substantial union wage premium accounts for a sizable portion of the public-private wage differential:

“… a substantial portion of the wage gap between workers in the public and private sectors comes about because of the higher degree of unionization in the public sector and the fact that unions tend to increase wages …

the fact remains that a public sector pay premium prevails even after controlling for

the impact of the higher degree of unionization in the public sec-tor.” Gunderson et al (2000: 12)

Research for Canada, over time, consistently finds an overall pay dif-ferential in favour of public sector employees; this pay differential:

• varies across BPS sectors and over time;

• is present across levels of government;

• has been found to be large at the provincial levels.

While the size of the wage premium varies across time, over the long run, public sector workers in Canada appear to have a wage advantage of approximately 5-10% overall in relation to private sector workers; and among provincial public sector workers the wage advantage is at the higher end of this range. Unions may also have a direct impact


on benefits;17 so that total compensation is also expected to be higher as well.

In principle, the reason as to why public sector employers look to benchmark or pattern wage/pay levels or increases after private sector employers is that the private sector labour market provides efficient wage/pay outcomes under competitive conditions. A persistent pay premium for public sector workers is likely due to such explanations as the absence of competitive labour markets (e.g., sustained rents that are captured by public sector unions); or more equitable, and possibly more efficient, pay systems in the public sector (e.g., resulting from effective pay equity policies in the public sector and sustained discriminatory pay practices in the private sector); or by higher pro-ductivity levels in BPS industries (e.g., which would be consistent with a more highly trained or educated workforce).

The main policy issue remains whether or not the pay premium is associated with commensurate positive economic efficiency (productivity) and equity outcomes.

2.2.3 Patterns of Negotiated BPS Wage Increases over Time

Figure 3 displays the annual percentage change in GDP, and the difference between annual wage increase settlements in large (500+ employees) Ontario BPS collective bargaining units and the increases in the Ontario private sector settlements over the period from 1983 – 2009.18 Since the early 2000s, negotiated wage increases for large bargaining units in the Ontario BPS have been greater than the ne-gotiated increases among large private sector bargaining units.

Over the entire time period, there is no obvious relationship between the difference in the rate of increase in public sector contracts versus private sector contracts, and changes in GDP (or the business cycle). Over most of the period, wage increases in public sector contracts were greater than the wage increases negotiated in private sector contracts: from 1983-1991, wage increases in the Ontario public sector exceeded private sector increases; Ontario BPS annual wage

17 See Freeman (1981) and Kornfeld (1993). 18 For the data sources for Figure 3 refer to Appendix C: Source Document,

Section 1 on “Economic and Labour Market Data.”


increases were lower than the increases in the private sector over the period from 1992 to 2002; and since 2003, annual wage increases in BPS agreements again exceeded the increases in the private sector.

Although caution is required in interpreting these data, they are con-sistent with the ability of public sector unions to yield a larger union-nonunion wage advantage than their private sector counterparts; and consistent with a sizable public sector union wage premium being a factor explaining the magnitude of the overall public-private sector wage differential.

An important issue is whether or not comparisons between BPS collective bargaining wage settlement levels (increases) and wage settlements in the private sector are actually relevant to the parties and therefore for labour relations policy purposes? In our assessment:

1. A focus exclusively on negotiated wage increases as a source of

increasing labour costs would miss the important role of wage/

pay increases arising from institutional wage setting mechanisms

– such as adjustments arising from progress-though-the-ranks,

or variable pay systems, merit pay and bonuses, and other forms

of pay rises that are not necessarily directly related to collective

bargaining.


As noted above, such increases would be deemed to be justified

on the basis of the increased productivity associated with the em-

ployees’ enhanced performance; these sources of pay increases

would bear further review.

2. If wage settlements in the public sector exceeded private sector

settlements by a sizable amount (placing to one side the issue of

what is “sizable”), then whether or not a policy response is re-

quired would depend upon the main factors driving the differen-

tial.

3. The most important factor/indicator relevant to assessing wheth-

er or not real wage/pay increases are sustainable is productivity.


2.3 Conclusions

Overall, the high degree of unionization and central roles of collec-tive bargaining and interest arbitration result in:

(i) the overwhelming majority of (nonexempt) employees in the

Ontario BPS having their compensation levels determined di-

rectly through the collective bargaining process.

(ii) the pay rises of exempt employees likely being tied to (“keep

pace with”) pay increases of unionized employees;

(iii) interest arbitration being a major determinant of , and pattern-

setter, for compensation in the Ontario BPS, so that its actual in-

fluence on pay levels throughout the Ontario BPS is significant.

The parties to negotiations require a common, comprehensive set of relevant Ontario labour market and workplace data to properly conduct their background analyses for collective bargaining. Both the parties and policy makers require such data in order to facilitate a common understanding of economic conditions and issues.

These considerations suggest that the government should commit to:

1. The provision for resources sufficient to collect and disseminate economic, labour market, and related industrial relations data in support of the conduct of effective collective bargaining.

Much of the data and information that would be required exists but is not available or accessible to the parties. The government should therefore:

2. Establish a single Labour Relations Information Bureau to sys-tematically collect and disseminate the range of data and infor-mation relevant to employers and unions in their negotiations; and identify to data and other information/knowledge gaps. Of particular importance is developing data and measures of pro-ductivity.

19 Note that there is no research evidence on this specific outcome.


3. Provide funds, through the Bureau, to support research on tar-geted areas of significant relevance to the collective bargaining process (e.g., the existence/magnitude of private-public sector pay differentials; and the factors that account for pay differen-tials; productivity studies).

In addition to these resource considerations, the government should:

4. Undertake a comprehensive review of non-collectively bargained pay-setting mechanisms and compensation practices in the BPS (as examples, variable, merit and bonus pay practices; and pay-setting mechanisms for executives, government-appointed office-holders) with a view to ensuring that compensation is aligned with objective economic criteria and outcomes (e.g., productiv-ity; quality).


Section 3:

Labour Relations and Interest Arbitration in the BPS

3.1 The Role of Interest Arbitration in Wage Determination

Public sector services are typically deemed to be “essential” when a work stoppage has the potential to impose “undue hardship” on the public;20 as examples, stoppages that endanger the personal well-being of the public (e.g., their health or security) or otherwise impose an extensive and significant hardship, typically in the form of economic loss (e.g., in the case of a rail work stoppage that had the effect of harming production in a substantial number of other industries such as autos, or consumer goods, that are dependent upon rail).21

Given that policy makers deem a particular group of services/em-ployees as essential, the rights of workers are typically subsequently restricted by mandating that they be denied the right to strike (nei-ther can there be a lockout). Where a strike/lockout is prohibited, the most common mechanism for resolving an impasse is binding interest arbitration of the outstanding issues. A variant of this model permits the right to strike but designates a segment of the workforce as essential, so that the designated workers are compelled to maintain a basic set of services to the public in the event of a work stoppage.

The interest arbitration process in Ontario is a major determinant of wage (compensation) settlements in the Ontario BPS for unionized employees. It is strictly relied upon in the hospital and acute care, long-term care, policing, and firefighting (sub-) industries and is used periodically in other industries such as ambulance services and energy by the parties to determine pay. Currently, interest arbitration has the

20 See: Labour Law Casebook Group. Labour and Employment Law. Eight Edi-tion. Toronto: Irwin Law, pp. 486-487.

21 See: A. Ponak and L. Falkenberg (1989: 272); and Adell, Grant and Ponak (2001).


potential to directly affect a large proportion of BPS employees – ap-proximately one-third of employees in the Ontario BPS are subject to this process. In addition, and it has strong potential to set wage patterns for other unionized workers who normally do not make use of the interest arbitration process.

3.2 Outcomes of Arbitration Awards

3.2.1 Labour Relations Outcomes

There is a general view that settlements achieved through uncon-strained collective bargaining with the right to strike/lockout is prefer-able to other mechanisms for achieving contracts because the parties are in the best position to craft the necessary tradeoffs required to achieve an agreement. Under a compulsory interest arbitration re-gime, there are potential first-order effects on outcomes such as wages (e.g., higher wages or patterning), or direct conflict (by precluding a work stoppage); and undue reliance upon arbitration at the expense of engaging in meaningful negotiations to resolve the majority of issues (I.e., the “narcotic effect”). There are also concerns about possible second-order effects on such outcomes as the quality of the overall terms of an award (in relation to the preferences of the parties), or on long-term relationship-based conflict.

There is also some evidence that a ban on strikes/lockouts and the

use of compulsory arbitration may have “unintended consequences”

(e.g., an affect on other forms of workplace conflict).23 However,

this type of outcome is typically weighed against the first-order costs

associated with a strike or lockout that might occur in the absence

of compulsory arbitration (especially in relation to the disruption of

public services).

22 See: Anderson, J. and T. Kochan (1977); and Dachis and Hebdon (2010).23 See: Dachis and Hebdon (2010); Hebdon and Mazerolle (2003); and

Hebdon and Stern (2003).


In practice, the focus of most interest arbitration awards is on un-resolved monetary issues. While many non-monetary issues can be, and are, decided by an arbitrator, there is probably a preference by most arbitrators to not decide non-monetary issues, where possible, because:

the issues may be complex;

• there may be opportunities through negotiations to explore out-

comes that yield mutual gains; and

• the parties often have access to unique institutional knowledge

required to craft an effective and mutually acceptable solution.

Another concern is whether or not the parties, subject to a “narcotic effect”, not only rely upon arbitration too readily, but also too read-ily rely upon arbitrators to resolve an increasing range of issues that would normally have a high potential to be resolved through collective bargaining and prior to arbitration – but for which the parties instead come to rely upon arbitration. This would lead to an expanding scope of issues placed before arbitrators. Although systematic evidence is lacking on this issue, there are case examples where arbitrators are asked to resolve a very large number of non-monetary issues.

3.2.2 Patterning of Wage Outcomes

There is limited Canadian research evidence regarding the relative wage increases achieved in settlements concluded through collective bargaining (with or without a strike) versus wage settlements resulting from interest arbitrations. The evidence that is available supports the concern that monetary outcomes arising from the interest arbitra-tion process are higher than the levels that would prevail without compulsory arbitration.

In addition, there is some evidence that there is less variance in out-comes under interest arbitration. This result is consistent with the

24 See: Currie and McConnell (1991); Currie and McConnell (1996); Dachis and Hebdon (2010); Gunderson, Hebdon, and Hyatt (1996).

25 See: Currie (1994).


notion that some form of patterning behavior is a feature of the ar-

bitration process.26

3.3 Issues Related to the Interest Arbitration Process

In addition to the concerns regarding interest arbitration and wage escalation, and negative labour relations side-effects (e.g., narcotic effects), there are other significant issues regarding the arbitration process itself. These concerns have been expressed both within and from outside the industrial relations arbitration profession. The prob-lems are critical because they can directly impact the efficiency and legitimacy of the interest arbitration process and they can exacerbate other adverse outcomes, such as wage escalation.

Before proceeding with an examination of these issues, it is worthwhile emphasizing several key points at the outset:

• It is generally held that the Canadian industrial relations system

has benefited from a large complement of professional, highly

skilled, mediators and arbitrators;

• Arbitrators are valued for their capacity to make competent,

practicable decisions regarding complex issues; and the ex-

istence of unique styles of arbitration – which can affect the

awards rendered – are an inherent part of the process:

“There are probably as many styles of arbitration as there are

arbitrators, responding to a certain extent to the skills and

predilections of the arbitrators themselves, and to a certain

extent to the expectations and desires of the parties.”

26 Controlling for “selection” effects in the cases that go to arbitration.27 In this section, emphasis that has been added to quotations is indicated

by underlined text.28 Source: Report of the Arbitration Review Committee to the Minister of Labour (To-

ronto, Ontario, October 23, 1991) Jacqueline Campbell, Norm Carriere, Kenneth P. Swan, Chair.


• Arbitrators ought to function within well-defined parameters of

the process and expectations of the stakeholders regarding the

quality and scope of the awards rendered. It is the responsibility

of government policy makers (as well as the arbitration profes-

sion) to set these parameters and to undertake adjustments,

from time-to-time, that better define the arbitration process and

role of arbitrators in order to enhance the efficiency and out-

comes of the process and its legitimacy.

• The interests of the parties, including unions, employees and

employers, in relying upon interest arbitration may not always

coincide with the broader public interest.

• Specifically, while the parties may be satisfied with the wage out-

comes achieved under arbitration, the public interest may not be

served by a process that results in broad-based wage escalation

that exceeds the increases warranted by underlying increases in

productivity and inflation.

There are four main related issues with the current system of interest arbitration including:

1. The lack of a standard set of objective mandatory criteria (e.g.,

financial and economic circumstances) that are clearly under-

stood and that must be considered in determining monetary

outcomes.

2. The tendency for arbitration awards to “pattern” after previous

awards in a sector.

3. The systemic incentives inherent in the functioning of the

broader arbitration system for arbitrators to make their decisions

acceptable to the parties, in order for them to be retained in the

future, can create inefficient and inequitable outcomes.

4. The need for increased professionalization of the mediation and

arbitration profession.

In the following four sections we consider each of these issues, in turn.


3.3.1 Objective Criteria

The first issue concerns the lack of a standard set of objective mandatory criteria (e.g., financial and economic circumstances) that are clearly understood and that must be considered in determining monetary outcomes.

Various Ontario BPS labour relations Acts mandate several key factors that arbitrators must consider in determining an interest arbitration award including, as examples, “ability to pay”, “comparability”, and current economic circumstances (refer to Appendix A for examples of the precise criteria set out in Ontario legislation). However, it is recog-nized that operationalizing these criteria can be highly problematic:

“The items enumerated in section g(1.1) are clearly not exhaus-tive; nor does the statute give any guidance about the weight to be assigned to “relevant” factors - which, it will be seen, may not be susceptible to precise measurement or “proof’. On the contrary, there is an amorphous and contingent quality to some of these criteria that makes them very hard to apply in a way that produces a single unequivocal result - particularly in a setting that is largely isolated from free market considerations, and where the underly-ing financial framework is dependent upon the shifting political priorities of Government (the “ghost” at the bargaining table).”

The use of ill-defined criteria is likely to lead to subjective awards and outcomes because the pay awards may not be based upon objective factors and analysis; and lead to an increased reliance on previous awards as guideposts (i.e. patterning) because other awards become the only visible guideposts.

One potential objection to this criticism is that the application of mandated criteria ought not to interfere with the legitimate and ap-propriate role and latitude of arbitrators in applying various criteria.

29 Source: 2010: IN THE MATTER OF AN INTEREST ARBITRATION UNDER THE HOSPITAL LABOUR DISPUTES ARBITRATION ACT (“the Act”)] BETWEEN Service Employees International Union Local 2, Brewery, General and Professional Workers Union (“the Union”) AND Sunnybrook Health Sciences Center (“the Hospital” or “the Employer”) And in the matter of a dispute about the terms to be included in a collective agreement that will run from January 1,2008 until December 3 1, 20 10 BEFORE: R.O. MacDowell (Chair) Dan Anderson (Union nominee) Victor Trotman (Hospital nominee)].


However, the importance of having objective and accepted standards upon which to base awards is critical:

“The most common reasons for the reluctance to accept interest arbitration are the absence of agreed standards on which to base awards, the inability of arbitrators to take account of all the eco-nomic variables relevant to wage setting in a predominantly market economy, and the danger that the results will be less acceptable to the parties.”

A review of Ontario interest arbitration awards reveals a substantial and long-standing reliance on several main criteria, notably “replication” and “comparability;” whereas “ability to pay” is essentially rejected as a criterion. It is noteworthy that arbitration awards routinely state that they take proper account of all criteria set out in the relevant legislation (including “ability to pay”) even as there is overwhelming evidence and transparency around a general rejection among arbitra-tors of “ability to pay” as a criterion.

In what follows we assess the key principles of “comparability”, “replica-tion”, and “ability to pay”, that underlie interest arbitration awards in practice and/or are stipulated as criteria under BPS labour relations legislation.

(i) Comparability Principle

This criterion is widely acknowledged as relevant by arbitrators; and it would likely be utilized regardless of whether or not it was a specified criterion in legislation. The existing Ontario legislation provides for a form of “comparability” as a criterion. But this factor, as specified in legislation, is not particularly operational without a clear benchmark being defined.31 For example, Ontario legislation provides for:

“A comparison, as between the employees and other comparable employees in the public and private sectors, of the terms and

30 Source: Labour Law Casebook Group. Labour and Employment Law. Eight Edition. Toronto: Irwin Law. At p. 390.

31 Alternatively, requiring that the rationale for identifying another employer/occupational group as a valid benchmark be clearly specified and supported with criteria and evidence.


conditions of employment and the nature of the work performed.” (HLRA S. 9.(1.1)) and PSA 122 (5) and FPPA 50.5 (2)

Importantly, the legislation affords full scope for the misinterpretation or misapplication of the concept.

In fact, the comparability criterion is a well-established one; and it was adopted at the outset of public sector collective bargaining and interest dispute resolution.32 This principle originally tended to imply comparability to private sector groups, although an inability to identify appropriate private sector comparators would result in a broadening of the orbit of comparisons:33

“In Canada and the United States … the dominant criteria used by arbitrators in determining their awards is comparability. The comparison group is usually settlements elsewhere, especially in the private sector, albeit the lack of comparable groups in the private sector often means that other public sector settlements are emulated.” Gunderson and Hyatt (1996:255)

The objective of applying “comparability” was thus to approximate a result where workers with broadly comparable characteristics would be paid similarly. Private sector wage levels would be used as a point of reference for wage levels because the market is understood to provide a better basis for the efficient determination of wages that are related to productivity levels.34

32 Refer to Adams (1981) for an extensive discussion of the development of interest arbitration across the broader public sector. The comparability criterion was set out, for example, in the federal public sector where it was incorporated as a criterion in the Public Service Staff Relations Act; see Finkelman and Goldenberg (1983: 782, Appendix (March 1981) Public Service Staff Relations Act)).

33 Wage comparability with private sector employees has been enshrined in federal employee pay determination in the U.S., through the use of pay surveys; see, for example, Ehrenberg and Schwartz (1986).

34 This link between wages and productivity was established early on in interest arbitrations. For example, Adams (1981: 242) cites Shime’s analysis in British Columbia Railway Company and Brotherhood of Maintenance of Way Employees, Caribou Lodge, 221 et al (1977).


While wages would not be expected to match worker productivity at all points in time, in the long run, wage increases in the private sector would require corresponding increases in labour productivity; other-wise firms would not be operating efficiently (i.e., not cost-minimizing) and run the risk of failing. Similarly, wage increases in the public sector would also need to be matched by increases in productivity (in the long run) if publicly provided services are to be produced efficiently.

Originally, there was also a clear recognition that successful appli-cation of this principle would require objective data for evaluating comparability; this led to the use, in some industries, of wage surveys to ascertain “wage norms” in the private sector.35 Comparisons would then attempt to account for meaningful differences between workers in terms of productive characteristics, or working conditions, in order to find an appropriate private sector comparator group. Several major problems are apparent:

• There is a lack of analysis relating to relevant comparator groups.

It is worthwhile noting that comparing “the terms and condi-

tions of employment and the nature of the work performed” has

proven challenging in implementing pay equity legislation where

jobs are compared within organizations – and the challenges

associated with comparing terms, conditions and job characteris-

tics across organizations can be considerable.

• In order for the comparability criterion to be applied, there must

be a base of objective data (concerning “the terms and condi-

tions of employment and the nature of the work performed”)

available to arbitrators upon which to evaluate alternative poten-

tial comparator groups; but this information is currently often

lacking.

• Application of the comparability principle is difficult in practice.

35 In the Canadian federal jurisdiction, for the public and private sectors pay data was at one time collected for this purpose by the Pay Research Bureau (see Anderson and Kochan (1977: 243)).


There is a tenuous link between the concepts of “comparabil-

ity” in terms of employment (for example, comparing wage

outcomes across other collective agreements in an industry)

and “replication” (considering what the wage outcomes would

have been, had free collective bargaining been permitted). This

link exists because the process of generating a wage settlement

would, normally, have taken into account recent wage settle-

ments elsewhere. In practice, these distinctions are more concep-

tual than practical; and an attempt to apply these abstract prin-

ciples simply lends itself to relying on wage patterning.

(ii) Replication Principle

Settlements achieved through free collective bargaining are accepted, in principle, as being superior to imposed contract outcomes because the parties are in the best position to understand and undertake the myriad of tradeoffs that are required across the many issues being negotiated. Public policy across Canadian jurisdictions, as expressed through labour relations legislation, is generally premised upon this principle of voluntarism.

In the private sector model, which forms the original basis for public sector labour relations frameworks, the strike/lockout option can impose direct and significant costs on employers (i.e., lost revenue and profits) and employees (i.e., lost wages and benefits). The pres-sure created on the parties by the potential imposition of these costs – or the actual mounting costs in the event of a stoppage – create the conditions during negotiations to achieve the necessary complex set of concessions and tradeoffs required to achieve an agreement.

In BPS industries where there exists no right to strike (or, where there is a designation of a substantial subset of employees) the important role played by a work stoppage is either absent or considerably weak-ened. Interest arbitration provides a proven and accepted mechanism for resolving disputes over the terms and conditions of employment in circumstances where unfettered collective bargaining fails to achieve an agreement between management and the union, and where a strike is deemed to impose too high a cost on the public.

36 See: Chaykowski (2009).


The “replication” principle in arbitration follows the industrial rela-tions “wisdom” that collective agreements that are negotiated under unconstrained conditions (that includes the right to strike/lockout) would tend to result in (substantially superior) outcomes; and, as outcomes that the parties themselves crafted, they would be the result of a process of tradeoffs that the parties themselves undertook.

Early leading arbitration decisions recognized the fundamental impor-tance of the replication principle. In the arbitration decision Welland County Hospital, 1965, 16 L.A.C. 1, Arthurs, Wren and Cromarty identify the issue related to crafting a settlement that would have emerged had collective bargaining been possible:

“Wage levels fixed by a board of arbitration should be those which would have been produced by collective bargaining before the advent of compulsory arbitration.”

Similarly, in the important 2004 decision rendered in Bruce Power, Arbitrator Burkett notes:

“One of the guiding principles of interest arbitration, whether public or private sector, is replication. It is accepted that an interest arbitrator ought to attempt to replicate the result that would most likely flow from free collective bargaining.”

In a major, more recent, 2009 decision in rail, Arbitrator Picher elaborates further upon this principle:

“The parties are not in substantial dispute with respect to the guid-ing principles of interest arbitration. Specifically, they acknowledge that it is the role of the Arbitrator to replicate, as best he or she can, the outcome which would reasonably have resulted from the parties freely bargaining their own collective agreement outcome. That approach, referred to as the principle of replication, involves a number of factors, significantly including comparisons with freely negotiated collective agreements for similarly situated employees within the industry, with due allowance for current economic

37 Source: Bruce Power LP and Society of Energy Professionals (2004) 126 L.A.C. (4th) (Burkett), at p. 152.


conditions and the financial status of the employer, to the extent that it can be compared to a private sector enterprise.”

Contemporary arbitration awards in the Ontario BPS make extensive use of the replication principle, as evidenced in these case examples from 2010 awards:

“In determining the outstanding issues, we have been guided by the normative criteria; especially, replication. In that regard, and for example, the wages set by this award are identical to those ei-ther agreed to by the employer with its other unions or awarded at arbitration.”

And

“These awards and agreements demonstrate that the general wage increases awarded by this Board are normative and consistent with the principle of replication.”

And

“Certainly, in making our determinations, this Board recognizes that the statutory criteria under Article 9 (1.1) of HLDAA must be considered. We also recognize the applicability and overall signifi-cance of the replication theory, with our role being to replicate,

38 Source: 2009 Award: IN THE MATTER OF AN INTEREST ARBITRATION BETWEEN VIA RAIL CANADA INC. AND TEAMSTERS CANADA RAIL CONFER-ENCE Sole Arbitrator: Michel G. Picher.

39 Source: 2010 Award: IN THE MATTER OF AN INTEREST ARBITRATION BETWEEN: The City of Ottawa and IATSE Before: William Kaplan, Chair Ron LeB-lanc, Employer Nominee Joe Herbert, Union Nominee.

40 Source: 2010 Award: In the Matter of as Interest Arbitration Pursuant to the Hospital Labour Disputes Arbitration Act Between: ST. JOSEPH’S HEALTH CARE, LONDON (REGIONAL MENTAL HEALTH- LONDON AND ST. THOMAS) (“Hos-pital”) –and- ONTARIO PUBLIC SERVICE EMPLOYEES UNION, and its Local 152 (“Union”) Re: The terms of the parties’ collective agreement for the paramedical and professional staff unit for the period April 1,2009 to March 3 1,2011 DATE AND LOCATION OF HEARING: October 22, 2010, London. Executive session - Novem-ber 2,2010. Board of Arbitration: Brian Etherington, Chair Larry Robbins, Union Nominee Michael Riddell, Hospital Nominee.


as nearly as possible, the collective agreement which the parties would have reached in a free collective bargaining situation, were one to exist in this health care sector, a matter of considering what the parties would have achieved had they the right to strike or to lockout. We appreciate that there are widely accepted assessment factors to be considered and suitably weighed, such as comparability, demonstrated need, retention/recruitment issues, financial restric-tions and restraints, and total compensation in light of current and expected funding.”

Optimal interest arbitration awards are therefore often taken, in principle, to be ones that would closely mirror the settlement outcome that would be achieved in the situation where unfettered collective bargaining occurs and the strike/lockout option is allowed. The foregoing example of arbitration decisions notwithstanding, there is skepticism, and even serious concern, regarding the efficacy of the replication principle:

(i) Concern over the replication principle is reflected in current awards.

Ongoing concern with the relevance of the principle is illustrated in the commentary in the following 2010 Ontario BPS award:

“There is a strand of arbitral reasoning that suggests that the object of interest arbitration is to “replicate” the agreement that the parties would likely have reached through “free collective bargaining”. And who can quarrel with that? But, quite frankly, this mantra may not provide much guidance in a non-market context that is immunized from both the clash of “bargaining power” and from the free mar-ket pressures that would ordinarily influence the “price” of health services or the “price” of “input costs” like labour - especially where, (for example), the closest comparator wages may also be set in a context where market forces and collective bargaining pressures

41 Source: 2010 Award: In the Matter of as Interest Arbitration Pursuant to the Hospital Labour Disputes Arbitration Act R.S.O. 1990, c.H.14, as amended BE-TWEEN: F. J. DAVEY HOME Employer –and- ONTARIO NURSES’ ASSOCIATION Union: CONCERNING THE RENEWAL OF THE COLLECTlVE AGREEMENT (AUGUST 1,2006 THROUGH JULY 31,2009) BEFORE THE BOARD OF ARBITRA-TION: Thomas Jolliffe, Q.C., Chair Susan Ballantyne, Union Nominee Irv Kleiner, Employer- Nominee.


are blunted. [What other institution - public or private - is truly “comparable” to a hospital?]. Indeed, where “essential services” are concerned, employee bargaining power is deliberately constrained lest its exercise damage the public interest – which makes the “rep-lication principle” particularly difficult to apply.”

(ii) A key issue is what it is, precisely, that ought to be replicated?

In some circumstances, it could be argued that it ought to be a public sector “collective bargaining process” – not a private sector setting. However, in BPS industries in which interest arbitration is mandated, there is no comparator; and in industries where interest arbitration is used frequently but collective bargaining does achieve settlements (including industries in which strikes/lockouts are permitted) the collective bargaining settlement may have been influenced by recent arbitration decisions.

The first-order result is that the wage outcomes under “free” collec-tive bargaining are simply not observable. The net result is that, in practice, there is little in the way of relevant comparators in terms of unfettered collective bargaining.

(iii) The replication principle has little practical validity.

Winkler (currently CJO), in his key award in University of Toronto, clearly articulates the fundamental weakness associated with attempting to rely upon and implement a replication principle:

“The replication principle requires the [arbitration] panel to fash-ion an adjudicative replication of the bargain that the parties would have struck had free collective bargaining continued. The positions of the parties are relevant to frame the issues and to provide the bargaining matrix. However, it must be remembered that it is the

42 Source: 2010 Award: IN THE MATTER OF AN INTEREST ARBITRATION UNDER THE HOSPITAL LABOUR DISPUTES ARBITRATION ACT (“the Act”)] BETWEEN Service Employees International Union Local 2, Brewery, General and Professional Workers Union (“the Union”) AND Sunnybrook Health Sciences Center (“the Hospital” or “the Employer”) And in the matter of a dispute about the terms to be included in a collective agreement that will run from January 1,2008 until Decem-ber 3 1, 20 10 BEFORE: R.O. MacDowell (Chair) Dan Anderson (Union nominee) Victor Trotman (Hospital nominee).


parties’ refusal to yield from their respective positions that neces-sitates third party intervention. Accordingly, the panel must resort to objective criteria, in preference to the subjective self-imposed limitations of the parties, in formulating an award. In other words, to adjudicatively replicate a likely “bargained” result, the panel must have regard to the market forces and economic realities that would have ultimately driven the parties to a bargain.”

And

“While the replication principle is a key consideration, it must also be acknowledged that there is a certain amount of artifice involved in attempting to “replicate” the agreement that the parties “would have” reached. The very fact that third party intervention has been engaged means that the parties, based on their current positions, are at an impasse for which they forsee no resolution absent the assistance of the third party.”

(iv) There is a lack of objective information available to the parties and to arbitrators with which to apply the replication principle.

The replication principle, premised upon the importance of mimick-ing the outcomes that would be expected to arise from a free collec-tive bargaining process requires, at a minimum, a base of objective information with which to “estimate” or “replicate” an appropriate settlement. The practical task of arbitrators to craft awards (including wages; benefits; pensions, etc.) in accord with a replication principle rests on their ability to access relevant, objective data and analysis. Both of these inputs are significantly lacking in the current system.

(iii) Rejection of the “ability to pay” Principle

The fundamental problem in the “ability to pay” concept is that it is an ill-defined concept. The “ability to pay” criterion is (intended to) capture the impact of prevailing economic conditions on organiza-

43 Source: University of Toronto (Governing Council) and University of Toronto Faculty Association (2006) 148 L.A.C. (4th) (Winkler R.S.J.)] At p. 199.

44 Source: University of Toronto (Governing Council) and University of Toronto Faculty Association (2006) 148 L.A.C. (4th) (Winkler R.S.J.)] At p. 197.


tions. Inherent in the application of this criterion is the idea that a pay settlement (increase in costs) above some defined level would result in financial losses that would render the enterprise unviable.

The notion of “ability to pay” is problematic even in the private sec-tor. The notion that there is some well-defined level of wage increase beyond which a firm’s economic viability is jeopardized is, in practice, not definite because of the potential for a myriad of tradeoffs on other contract items that could make an otherwise unviable wage increase feasible. Perhaps the most compelling example of this is productivity bargaining.

In the public sector, in the short run, an enterprise is faced with a bud-getary constraint imposed by the amount of the government transfer;

under conditions of a budget shortfall in relation to current/recent expenditures, the enterprise must either change service levels (i.e., in terms of quantity or quality) or reduce operating/input costs. In the long term, the government, as a stakeholder in the industry, would have an interest in whether or not services are curtailed.

The basic problem with the private sector analog, as recognized by arbitrators, is that the Government’s budget constraint is not bind-ing by virtue of its capacity to raise revenue through taxation. In his 1990 McMaster University decision, Arbitrator Shime identified the basic reason as to why the ability to pay criterion was not equitable:

“There is little rationale for using ability to pay as an criterion in arbitration. … public sector employees should not be required to subsidize the community by accepting substandard wages and working conditions … Arbitrator/selectors have always maintained an independence from government policies in public sector wage determinations and have never adopted positions which would

45 In his 2006 award, Winkler highlights the potential relationship between “fiscal context” arguments and “ability to pay arguments” – where ability to pay as a principle has essentially been flatly rejected. In his decision, Winkler directly follows Shime in rejecting the ability to pay criterion. See: University of Toronto (Govern-ing Council) and University of Toronto Faculty Association (2006) 148 L.A.C. (4th) (Winkler R.S.J.)] At p. 199.


in effect make them agents of the government for the purpose of imposing government policy.”

In Bruce Power (2004), Arbitrator Burkett elaborates further on this line of reasoning:

“While it may be that in public sector interest arbitration (where tax dollars underwrite labour costs) it has long been held that an employer’s asserted inability to pay is not a relevant consideration, that rationale has no application to a private sector dispute. The issue arises in the public sector where an employer argues that it lacks the financial resources to provide its employees with a norma-tive salary increase. Arbitrators have rejected this argument on the basis that public sector employees ought not to subsidize the public purse by receiving substandard wage increases. In other words, pub-lic sector interest arbitrators have ruled that tax revenues must be tapped (whether directly or indirectly) to the extent of providing normative salary increases to public sector employees.”

The basic problem in BPS industries is, therefore, that (most) em-ployers have revenues that are a (significant) function of government funding transfers. Government revenues are, in turn, back-stopped by the Government’s capacity to raise tax revenues. This line of logic continues to be acknowledged by arbitrators today (as illustrated in the following 2010 BPS Awards):

“The “ability to pay” factor, when applied to public-sector collec-tive bargaining, has been said to be “elusive and subjective” Re Willowhaven Private Hospital (December 28, 1983) unreported version (Hope) p. 7, (para. I I I of the Association submissions). Public-sector employers at the community level have the ability to meet their compensation obligations arising from a collective agree-ment by way of adjusting taxation levels. That is not to say there is no limit to the economic burden taxpayers are expected to bear’, However, public-sector employees should not be required “to sub-

46 Source: McMaster University and McMaster University Faculty Association (1990) 13 L.A.C. (4th) (Shime) At p. 203-204.

47 Source: Bruce Power LP and Society of Energy Professionals (2004) 126 L.A.C. (4th) (Burkett) At p. 151-152.


sidize the service provided to the public by accepting sub-standard wages and working conditions” Re British Columbia Railway Co. and Brotherhood of Maintenance of Way Employees, Caribou Lodge, 22 J (June I, 1976) unreported version (Shime) p.8 (para. 92 of the Association submissions). Rather, “ ... if the community needs and demands the public service, then the members of the community must bear the necessary cost to provide fair and equitable wages [to its employees]” Re B.C. Railway, supra, p.8.”

And,

“…it cannot be disputed that, at least at the global level, “ability to pay” is influenced by the Government’s appetite to fund health care, it is not so obvious how that factor applies in a particular institu-tion, or to particular employee groups, or where local priorities and budgets are in play (the award seldom applies to the whole work force); moreover, item 2 seems to require the arbitrator to under-stand not only the meaning and elasticity of the phrase “current funding and taxation levels” but also to predict the likely “service” implications of particular outcomes (i.e. what the employer has to do, or might choose to do, after the fact).”

Interestingly, in his 1997 award, Arbitrator Jackson moved beyond the point of assuming the Government could simply backstop labour cost increases by relying upon what is, in effect, the notion of a taxpayer elasticity of demand for public services:

48 Source: 2010 Award: IN THE MATTER OF AN INTEREST ARBITRATION under s. 122 of the POLICE SERVICES ACT BETWEEN: PEMBROKE POLICE SER-VICES BOARD (the “Board”) AND PEMBROKE POLICE ASSOCIATION (Civilian Members) ARBITRATOR: William A. Marcotte.

49 Source: 2010Award: IN THE MATTER OF AN INTEREST ARBITRATION UNDER THE HOSPITAL LABOUR DISPUTES ARBITRATION ACT (“the Act”)] BETWEEN Service Employees International Union Local 2, Brewery, General and Professional Workers Union (“the Union”) AND Sunnybrook Health Sciences Center (“the Hospital” or “the Employer”) And in the matter of a dispute about the terms to be included in a collective agreement that will run from January 1,2008 until Decem-ber 3 1, 20 10 BEFORE: R.O. MacDowell (Chair) Dan Anderson (Union nominee) Victor Trotman (Hospital nominee).


“We define “ability to pay”, not as an employer’s short-term fiscal capacity but as its presumptive ability to justify to the public the necessity of any tax increase that might be required to pay for the award. …

The test, then, is the arbitration board’s view of what a majority of fair-minded, well-informed taxpayers would consider to be a fair and reasonable award, even if it meant tax increases. The greater the tax increase required to support the arbitration award, the more confident the board must be that that award is a reasonable and credible one, one that a majority of fair-minded, well-informed taxpayers would see as reasonable and fair. This squares precisely

with another of the new criteria, “the extent to which services may have to be reduced, if the current funding levels are not increased.” “

Regardless of the criteria that arbitrators are required to consider and that are enumerated in the HLDA or PSA, as Arbitrator Teplitsky has candidly noted, arbitrators continue to flatly reject “ability to pay” as a criterion:

“The parties know that ability to pay has been rejected by interest arbitrators for at least 4 decades.”

Continuing to require that “ability to pay” be used as a criterion is problematic because:

(i) It represents an imprecise concept that does not lead itself to

practical use;

50 Source: 1997 Award: In the Matter of an Interest Arbitration between The Regional Municipality of Niagara Police Services Board and The Niagara Region Police Association Uniform and Civilian Agreements. Before: Richard L. Jackson Ian 1. Roland Bruce H. Stewart, Q.C. 1997. At p.22.

51 Source: 2010 Award: IN THE MATTER OF A MEDIATION/ARBITRATION B E T W E E N: UNIVERSITY OF TORONTO - and - UNIVERSITY OF TORONTO FACULTY ASSOCIATION MARTIN TEPLITSKY, Q.C. Mediator/Arbitrator] Uni-versity of Toronto and UTFA (2011) 200 L.A.C. (4th) (Teplitsky) At p. 61.


(ii) The “ability to pay” principle, which is intended to introduce

economic and fiscal conditions into the calculus of wage awards,

is flatly rejected, in principle, by arbitrators.

The “ability to pay” criterion has become irrelevant as a major criterion for deciding awards. This is problematic because economic criteria appear to be of minimal importance in deciding interest awards.

3.3.2. Patterning of Awards

The second major issue concerns the tendency for arbitration awards to “pat-tern” after previous awards in a sector.

Under interest arbitration in the Ontario BPS, there is a tendency to simply pattern after previous, recent BPS awards or settlements, largely on the basis of achieving “comparability” or historical parity (equality) regardless of other characteristics that might be present and that differentiate workplace and enterprise outcomes. Specifically, patterning arises in the BPS from:

(i) The application of the longstanding principle of “comparabil-

ity” (the efficacy of this principle is considered above).

(ii) The traditional idea was that public sector settlements would be

compared to (benchmarked against) appropriate private sector

settlements (i.e., controlling for workplace and employee char-

acteristics, etc.) in order to yield a “comparable” public sector

pay rise.

(iii)The expectation and practice of maintaining inter-occupational

pay norms (typically set differentials or parity) regardless of

whether or not changes in relevant factors have occurred (e.g.,

changes in job content, working conditions, skill/educational

requirements, or other factors); and regardless of whether produc-

tivity differentials would warrant pay differences.

In certain Ontario BPS sub-industries (notably firefighting and po-licing), following patterns has, de facto, become the major criterion


used in arbitrations. The following excerpts from recent 2010/2011 decisions illustrate the centrality of this standard:

“The evidence discloses that for the past ten years there has been a relationship between the salaries of the Ottawa Police and the salaries of the R.C.M.P. and the Metropolitan Toronto Police which can be fairly described as representing parity or approximate parity. Although in any given year anyone of these three forces may

have earned more, over the entire period there has not been much divergence.”

And

“The economic issues have been determined in large part on a consideration of comparability/replication and total compensa-tion. It should come as no surprise that under the comparability/replication principle, we have addressed the economic issues by looking to the Durham Regional Police (because of the long ac-ceptance of essential parity between police and fire fighter rates) and to the prevailing terms and conditions under comparable fire service agreements, especially those in the other Durham Region fire services, i.e. Pickering, Ajax, Whitby and Oshawa.”

And

“The wage increases contained herein are also quite consistent with the average annual increase in the rate of inflation of 2.1 % referred to in the Union brief (at page 66) and the statistics from the Ontario Ministry of Labour showing general wage increase

52 Source: 1980: IN THE MATTER OF AN ARBITRATION BETWEEN: THE BOARD OF COMMISSIONERS OF POLICE FOR THE CITY OF OTTAWA and THE OTTAWA POLICE ASSOCIATION LIMITED BOARD: M. Teplitsky, Q.C., Arbitrator.

53 Source: Award: 2010: IN THE MATTER OF AN ARBITRATION BETWEEN: THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON (“the Employ-er”) AND: THE CLARINGTON FIRE FIGHTERS’ ASSOCIATION, IAFF LO~AL3 139 , (“the Association”) IN THE MATTER OF: RENEWAL COLLECTIVE AGREEMENT BOARD OF ARBITRATION: Kevin M. Burkett – Chair Brenda Glover - Employer Nominee Sean McManus - Association Nominee.


patterns in both the private and public sectors in Ontario over the past year (reproduced below).”

And

“Accordingly, in line with the criterion in s.122(5) of the Act, and in line with the consistent, long-standing practice of interest arbitra-tors, comparisons as between the Association civilian employees and similarly or comparably-employed civilian members in other police services boards shall be central to decision-making on outstanding issues before me.”

And

“We have seriously considered whether we can grant less than the industrial normative increase granted in the OPSEU central agreement. We have concluded that we cannot. The setting of the industrial norm is done in the central agreement, not in a following agreement, such as this. Were we to heed the appeal for savings on wages in this hospital, when all others have followed the trend set by the central agreement for the same period, then the workers in

54 Source: 2010: In the Matter of as Interest Arbitration Pursuant to the Hospital Labour Disputes Arbitration Act Between: ST. JOSEPH’S HEALTH CARE, LONDON (REGIONAL MENTAL HEALTH- LONDON AND ST. THOMAS) (“Hos-pital”) –and- ONTARIO PUBLIC SERVICE EMPLOYEES UNION, and its Local 152 (“Union”) Re: The terms of the parties’ collective agreement for the paramedical and professional staff unit for the period April 1,2009 to March 3 1,2011 DATE AND LOCATION OF HEARING: October 22, 2010, London. Executive session - November 2,2010. Board of Arbitration: Brian Etherington, Chair Larry Robbins, nion Nominee Michael Riddell, Hospital Nominee.

55 Source: A10-621

[2010; IN THE MATTER OF AN INTEREST ARBITRATION under s. 122 of the POLICE SERVICES ACT BETWEEN: PEMBROKE POLICE SERVICES BOARD (the “Board”) AND PEMBROKE POLICE ASSOCIATION (Civilian Members) ARBITRA-TOR: William A. Marcotte]


this bargaining unit would be treated adversely and unjustly penal-ized relative to their peers in the province.”

Patterning can lead to wage escalation across a sector because:

(i) of the broad application of the principle of comparability un-

derlying the awards process;

(ii) of the maintenance of historical comparative pay norms;

(iii) arbitrators may not be taking full account of the economic and

other factors that are relevant to a specific employment setting

and collective bargaining context.

Patterning may therefore result in wage increases being awarded, in a particular collective bargaining context, which may not reflect the economic circumstances of that employer/employee relationship – so that wage changes become disconnected from changes in productivity or other critical cost factors.

3.3.3 Arbitrator Decision-Capturing by the Parties

The third major concern arises from the systemic incentives inherent in the functioning of the broader arbitration system for arbitrators to make their deci-sions acceptable to the parties, in order for them to be retained in the future, can create inefficient and inequitable outcomes.

Under the current system, the parties have significant influence over the choice of arbitrator. The consequence of this system is that ar-bitrators render decisions that can be systemically influenced by the

56 Source: 2011: IN THE MATTER OF AN ARBITRATION BETWEEN THE OTTAWA HOSPITAL (“the Hospital” / the Employer”) - AND - ONTARIO PUBLIC SERVICE EMPLOYEES UNION for its LOCAL 464 (“OPSEU” / “the Union”) Full and Part-time Hospital Professionals CONCERNING AN INTEREST ARBITRATION UNDER THE HOSPITAL LABOUR DISPUTES ARBITRATION ACT (HLDAA) BOARD OF ARBITRATION Christopher Albertyn – Chair Ron LeBlanc – Employer Nominee Larry Robbins – Union Nominee.


incentives created by their need to please the parties in order to obtain future appointments. These pressures are exacerbated by the fact that there is no meaningful requirement for the award/pay outcome to be based upon objective criteria. This incentive to “accommodate” can be even further exacerbated in situations where arbitrators also rely upon maintaining their acceptability to the parties in order to be retained to settle rights arbitration cases.

It is important to emphasize that this is a problem that is inherent in the design of the current system, in which the parties can determine the choice of arbitrator and, in so doing, “capture” the arbitrator.

A common counterpoint is that the parties rely on, and benefit from, being able to choose an arbitrator who “knows the players” or “knows the history” of a particular labour relations relationship. This point holds weight in rights arbitration cases where workplace justice must be achieved.

With regard to interests, once a collective agreement settlement is

either agreed upon or imposed, it is management and unions that

must implement the contract, its clauses, MOUs, etc., in the work-

place, “on the ground”, on a day-to-day basis, and make the myriad

of adjustments and accommodations necessary in order to make the

workplace function and the contract clauses practicable; arbitrators

are not generally aware of the ongoing tenor of labour relations (un-

less they are also undertaking rights arbitration work).

Perpetuating a selection process that has a design that lends itself

to a classic moral hazard problem does not lend itself to producing

fair, efficient, and cost effective access to just settlements – which are

hallmarks of both interest and rights arbitration processes.57

3.3.4 Enhancing the Profession

The fourth concern relates to the need for increased professionalization of the mediation and arbitration profession.

Mediation is the intermediate stage between the point of acknowledge-ment by the parties that collective bargaining has led to an impasse

57 See: Winkler (2010).


and the necessity of submitting the dispute to interest arbitration. Mediation is an important and successful element of the labour rela-tions dispute resolution process and capacity to successfully mediate disputes needs to be strengthened. In some jurisdictions, the media-tion and arbitration process can be undertaken by the same dispute resolution professional.

The process of the professionalization of the broader dispute resolu-tion/ conflict management profession in Canada has been gradual, but significant advances have been achieved and formalized.58 More specifically, in labour relations, whereas very few formal education programs existed in industrial relations in Canada several decades ago, there currently exist a number of formal certificate programs and advanced university-level degree programs in industrial rela-tions—which often include formal studies in labour relations, labour law, conflict management, and dispute resolution.59 These programs, together with the federal-provincial-territorial government’s special-ized programming, and other Ontario Ministry of Labour programs related to labour relations, as examples, already provide a sound basis for advancing the broader dispute resolution profession.

Further advancement of education and the study of industrial rela-tions and its component activities is fundamental to producing im-proved industrial relations outcomes in the economy. Regardless of the current level of formal training background of practicing labour arbitrators, increasing the professionalization of labour arbitration and mediation practitioners is a necessary condition for advancing the quality of the mediation and arbitration services provided. There are two dimensions to this issue of the professionalization of the mediation and arbitration profession:

58 For example, in the profession, the ADR Institute of Ontario; and in higher education, advanced programs at Royal Rhodes.

59 It is important to acknowledge that government-led programs in mediation, and university continuing education programs in mediation and conflict resolution such as exist at University of Waterloo, University of Toronto, and Queen’s Univer-sity, have made significant contributions to advancing the practice of mediation and arbitration and conflict resolution.


• Skills sufficiency.

The current system lacks a coherent approach to ensuring per-

formance standards (e.g., through minimum required creden-

tials) and the resources to support mediators and arbitrators in

developing and meeting those standards. Two steps are required

to advance skills:

- first, identify core skill requirements for mediators and

arbitrators; and

- second, invest in programs that will build these skills in

mediators and arbitrators.

• Conduct.

In mediation and arbitration professions that determine out-

comes that affect the fundamental interests of third parties, a

strong code of ethics/conduct is essential. This issue assumes

even greater importance where the outcomes impact the broad-

er public interest. We note that this recommendation was

reflected in the recommendations of the 1991 Ontario Swan

Report in the context of examining rights arbitration.60

Supporting the development and ensuring the implementation

of a strong set of professional standards is a necessary condition

for advancing the quality of the mediation and arbitration ser-

vices provided.61

3.4 Conclusions

One of the main themes of this report is that the arbitration system needs to be operated at arms-length from the parties, shifted in favour of more objective analysis, based upon objective criteria, and supported by systematic data and research.

The interest arbitration process can be made more efficient, and the outcomes can be better aligned with the broader public interest, by implementing concurrently the following complementary systemic reforms across the BPS by:

60 The “Swan Report”: Report of the Arbitration Review Committee to the Minister of Labour (Toronto, Ontario, October 23, 1991) Jacqueline Campbell, Norm Carriere, Kenneth P. Swan, Chair. Mimeo.

61 For an approach to fostering good practices and principles for neutrals, generally, see: Chaykowski, Cutcher-Gershenfeld, Kochan, and Merchant (2000:34).


1. Requiring Objective Criteria. Modify the sections in the relevant

labour relations legislation in the BPS to include specific and

well-defined objective criteria (e.g., economic factors) that inter-

est arbitrators would be required to account for in formulating

their awards/decisions.

Significant wage increases without sizable productivity increases

may appear to be sustainable over short periods of time but, in

the longer term, would be expected to impose direct costs on the

government and the public. These effects would be exacerbated

when economic growth is low and as the size of the labour cost

component of government expenditure is increasing (i.e., aris-

ing from the compounding effect of rising wages and growing

BPS employment levels).

Therefore BPS wage increases must be sustained by increases in

labour productivity over time and economic criteria therefore

must be mandated.

2. Enhancing Accountability. Modifying the sections in the relevant

labour relations legislation in the BPS to create accountability

by specifying that arbitrators be required to provide clear as-

sessments and reasons for the decision that are based upon the

criteria specified in the legislation, as well as any others.

3. Ensuring Independence. Remove the influence of the parties

on the choice of arbitrator by creating an arms-length arbitrator

assignment process guaranteed by the government and by sup-

porting the professionalization of the mediation and arbitration

profession. This would include:

i. New legislation in the form of an Ontario Public Services Arbitra-tion and Mediation Act (PSAMA).

The PSAMA would provide for the establishment of an inde-

pendent Commission (a BPS Public Service Dispute Resolution

Commission or its equivalent) with:

62 By “equivalent” we mean to leave open the matter of implementation; whether or not a new Commission is created as stand-alone, or the specified functions and resources are hinged onto a substantially revamped Ontario Labour Relations Board/Commission, reflects alternative implementation models that would still require that all of the outcomes we identify be achieved.


• Responsibility for all BPS industries and structured with

appropriately staffed and resourced sections (that would

replace existing boards and commissions such as currently

exist in police and education) to specialize as needed in

particular sub-industries;

• Responsibility to create, maintain, and manage a roster of

independent arbitrators (mediators);

• Arbitrators (mediators) to be assigned to dispute cases by the

Tribunal/Commission independently of the parties;

• Arbitrators (mediators) assignments to be coordinated across

the BPS; this could include provision for appointment of

arbitrators across sectors in the BPS;

• Mediator and arbitrator assignments to be made in a timely

and efficient manner.

• Proactive monitoring of interest arbitration awards to ensure

that awards reflect mandated criteria and the requirement to

provide fulsome reasons; and

• Ensuring transparency with the public by publishing awards

electronically.

ii. Dedicated resources to increase the professionalization of the

arbitration and mediation roles, including training and develop-

ment, and support for the creation of a formal Code of Ethics for

arbitrators and mediators.

Resources should be made available in two targeted streams:

a. Through the Commission to establish training and

development programs and to establish and maintain a Code

of Conduct; and, mandated in the PSAMA.

b.Through the appropriate line ministry (e.g., Ministry of

Labour) with a view to partnering with educational institutions


in order to build greater capacity within the Ontario industrial

relations practitioner system.

4. Creating and Maintaining Data Resources. (Further supporting

the recommendation made in Section 2 above for a Labour Rela-

tions Information Bureau). Providing resources sufficient to col-

lect and disseminate economic and related industrial relations

data in support of the conduct of effective mediation of disputes

and to provide a comprehensive factual basis for formulating

interest arbitration awards.


Section 4:

Collective Bargaining Structures in the Ontario BPS

4.1 Efficiency in Bargaining Structures

Approximately 1.2 million Ontarians are employed in the Broader

Public Sector (BPS)63, providing a diverse range of services and public

goods. As noted above, the BPS is highly unionized; currently there

are approximately 3,900 collective agreements covering more than

860,000 workers. In this context, collective bargaining structures and

practices play an integral role in determining economic efficiency and

productivity, and costs. Consequently, reforms of the public sector

which seek to promote efficiencies and improve value must consider

whether, how, and in what context, alternative bargaining structures

and enhanced coordination could yield outcomes which promote

efficiencies and improve value.

There are three broad principles that determine overall efficiency in

relation to collective bargaining structures:

(i) Coordination and engagement. This principle is that key stakeholders, including the funder,

employers, and bargaining agents, coordinate and engage in the

bargaining process.

(ii) Alignment. This principle requires that the funders who determine and bud-

gets be at the bargaining table where future financial outcomes/

costs are determined.

63 Total employment based on data from Statistics Canada CANSIM Table 2810024. Employment (SEPH), unadjusted for seasonal variation, by type of employee for selected industries classified using the North American Industry Classification System (NAICS), annually (Persons)


(iii) Flexibility and sensitivity to local practices and requirements.

This principle acknowledges that central bargaining structures

cannot be presented as the singular best model because of the

diverse labour relations, funding, and employer/union contexts

across sectors.64

4.2 Determinants of Bargaining Structure

There is general consensus among industrial relations scholars that

bargaining structures influence the process and outcomes of collec-

tive bargaining.65However, there is no empirical consensus regarding

whether or not fragmented bargaining structures result in higher wage

settlements. Some scholars have found fragmented bargaining struc-

tures lead to higher rates of industrial conflict and more favourable

wage outcomes for unions.66 In sectors where there is fragmentation

in the structure of collective bargaining, the fragmentation can add

significant transaction costs to individual agencies across the BPS. The

‘efficiency theory’67 of bargaining centralization suggests that central-

ized bargaining reduces such costs. Likewise, tripartite bargaining

arrangements, starting with corporatist incomes policies in the 1970’s

and social dialogue arrangements more recently, have achieved some

success in wage moderation and workplace flexibility.68

Bargaining structure is shaped by the institutional context, such as

the governing legal frameworks and economic conditions, and by the

practices and preferences of the parties. Formal bargaining structures

are concerned with the degree of centralization measured by the

number and diversity of unions and employers involved in negotia-

tions and signatory to a collective agreement. Informal bargaining

practices concern the level and extent of coordination of bargaining

goals and tactics by unions and employers. Coordination strategies

and bargaining structures are associated with bargaining power, intra-

organizational negotiations and politics, the bargaining mix and types

64 For a discussion of this theme, see Sweeney, McWilliams, and Hickey (in press).

65 See: Rose (1986).66 See: Anderson (1982). 67 See: Zagelmeyer, S. (2007).68 See: Katz, Lee and Lee (2004).


of issues negotiated, as well as the extent of conflict and potential for

labour disruptions.

The determination of bargaining units during union certification

procedures sets the initial bargaining structure. As a result, orga-

nizational structures and occupational groupings often shape the

bargaining structure. Over time, unions or employers may perceive

benefits to more coordinated bargaining strategies or more central-

ized bargaining structures. These historical trends may bring several

different bargaining units, employers and unions into single collective

agreement. Local agreements often supplement centrally bargained

master agreements.

Table 4.1 presents a summary of the six basic bargaining structures

based on the number of unions, establishments and employers rep-

resented in the negotiations process. The most prevalent forms of

bargaining structure in the private sector involve a single union and a

single employer at a single or multiple worksites. Bargaining involving

multiple unions and multiple employers has become rare, especially

since the demise of industry agreements in steel, forestry and trucking.

The growth of bargaining centralization in the broader public sector

appears concentrated in the area of multiple employers and a single

union. Central agreements in the hospital and long term care sectors

are examples of this form of bargaining structure. The emergence of

provincial discussion tables in education and developmental services

has generated a process similar to centralized bargaining, but has not

yet institutionalized the structure (see Sweeney et al. in press).


Since the early 1980’s, industrial relations scholars have noted that

private sector bargaining has become increasingly decentralized.70

Katz (1993) found two compelling explanations for the trends in

bargaining decentralization. First, decentralization can be explained

as a decline in union bargaining power. In the private sector, the

intensification in international competition and decline in union

membership led employers to decentralize bargaining structures in

the expectation that it would lead to more favourable outcomes.

Katz notes that the process of decentralization provides employers

with the ability to play one local union off another (whipsaw). Once

the concessions are extracted, the employer may prefer to return to

centralized bargaining to realize the advantages of stability, predict-

ability and economies of scale. Decentralization, according to this

analysis is a tactic to gain more bargaining power by undermining

the ability of unions to coordinate. Second, decentralization can be

explained by management initiatives to change work and to seek more

flexibility at the shop floor. Such work restructuring drove the focus

69 Adapted from Chaykowski (2009), Table 10.1 at p. 250. 70 See Katz, H. (1993).


of bargaining to the enterprise level where local unions and local

managers could best negotiate new work practices.

In one of the few large scale empirical analyses into the determinants

of bargaining structure, Zagelmeyer71 found the process of central-

ization or decentralization of bargaining structures were shaped by a

complex combination of factors.

[The analysis] shows that the number of unions present at the es-tablishment, membership of an employers’ association, and public sector affiliation are positively associated with collective bargaining centralization, while establishment size, trade union density, for-eign ownership and control and international product markets are negatively associated with centralization. Zagelmeyer(2007: 252)

According to this analysis, union and employer preferences reflect a

cost-benefit analysis of different models of bargaining structures. Cen-

tral to this decision are the expectations of how to increase bargaining

power and therefore gain a strategic advantage at the bargaining table.

Brauer72 found that the highly centralized structure of collective

bargaining in Israel were successful in achieving wage constraint in

ways similar to incomes policies in corporatist economies. However,

local level wage drift tended to make centrally bargained constraints

ineffective. The author concludes that consensus among the parties,

not bargaining structure per se, was key to the success.

This study also highlights the distinction between centralized bargain-

ing structures and coordination of bargaining strategies. Centralized

bargaining reflects the institutional structure of single negotiations

process, typically involving multiple worksites, multiple employers and

multiple unions. Bargaining coordination is distinct from the structure

in that a decentralized bargaining environment may involve a high

degree of coordination by one or both parties. Weak coordination

makes centralized structures ineffective if local parties are allowed to

deviate from the centrally bargained outcome.

71 See: Zagelmeyer (2007). 72 See: Bauer (1990).


4.3 Bargaining Structure, Power, and Employer Associations

4.3.1 Bargaining Structure and Bargaining Power

Bargaining structures are seen as both a contributing factor to and

an outcome of bargaining power.73 Theories concerning bargaining

power have been central to our understanding of negotiations pro-

cesses and outcomes.74 The factors determining bargaining power are

diverse and dynamic. Environmental factors such as public support

for unions, economic conditions and legislative frameworks influence

the relative bargaining power of the parties. Organizational factors,

especially the capacity to coordinate bargaining agendas and strate-

gies, are also important.

Asymmetrical coordination of bargaining practices (such as whip-

sawing), generally provides enhanced bargaining power to the more

disciplined and coordinated party. Historically, both unions and em-

ployers have effectively used whipsawing tactics to extract bargaining

concessions. Auto assembly employers have effectively forced local

unions to compete for capital investment and product sourcing by

demanding wage and work rule concessions. Unions which pursue

pattern bargaining strategies rely on a lack of coordination among

employers. Table 4.2 represents the bargaining power matrix which

results from the interactions in the level of union and employer

bargaining coordination. Centralized bargaining structures require

high levels of coordination on the part of both parties. Centralized

bargaining structures cannot compensate for weak coordination.

Asymmetrical coordination leaves one party vulnerable to whipsawing.

73 See: Katz (1993). 74 Refer to: Chamberlain and Kuhn (1986), Bacharach and Lawler (1984),

and Livernash (1963).


Rose75 found that bargaining accreditation legislation made employ-ers’ associations in construction more cohesive and less vulnerable to coordinated bargaining strategies by unions, such as whipsawing. While the frequency of construction strikes declined, other measures of strike activity, such as person days lost, increased following the legislation. Prior to the legislation, Rose found that employer associa-tions were ineffective because they lacked authority to bargain and bargaining structures were fragmented and decentralized.

Rose also found that wages continued to rise just as rapidly in cen-tralized structures. Thus the growth of non-union competition and other market factors were more important than legislative remedies in controlling wage growth. Still, Rose concluded that the “consolidation of bargaining structures also reduced the frequency of strikes and an important source of wage inflation, namely the ability of construction unions to leapfrog wages within and among labour markets” (Rose 1986: 17). Key to the consolidation of bargaining structures was the legal mechanism to address the lack of authority, coordination, and discipline among employer associations.

There is substantial evidence in the industrial relations literature that the role of employer associations is essential to coordination and effective centralized bargaining structures.76 Union structures and strategies tend to be naturally inclined towards coordination,

75 See: Rose(1986). 76 Refer to: Plowman (1988), Doellgast and Greer (2007), and Kochan, Katz,

and McKersie (1994).


though variation in the degree of coordination and preference for lo-cal negotiations are still evident. Legislative and operational support for employer associations can balance bargaining power and improve bargaining efficiencies.

4.3.2 Employer Associations

Accredited bargaining rights for employer associations can be ob-tained in three ways (Rose, 1986). Compulsory accreditation requires employers within a designated jurisdiction to join and be represented by a single association by legal statute. In Ontario’s BPS, the College Employers Council is an example of this form of legally designated accredited bargaining rights. Similar legal frameworks are present in some construction jurisdictions. The Ontario Labour Relations Act 57(1) provides for voluntary accreditation.

57. (1) A collective agreement between an employers’ organization and a trade union or council of trade unions is, subject to and for the purposes of this Act, binding upon the employers’ organization and each person who was a member of the employers’ organization at the time the agreement was entered into and on whose behalf the employers’ organization bargained with the trade union or council of trade unions as if it was made between each of such persons and the trade union or council of trade unions and upon the employees in the bargaining unit defined in the agreement, and, if any such person ceases to be a member of the employers’ organization during the term of operation of the agreement, the person shall, for the remainder of the term of operation of the agreement, be deemed to be a party to a like agreement with the trade union or council of trade unions.

Under this form of accreditation, only those unionized employers who join the association and assign their bargaining rights to it are covered by the terms of the collective agreement. This form of ac-creditation differs from the various examples of Provincial Discussion Tables which have taken place in the Education and Developmental Service Sectors. In these cases, the employer associations (such as the


OPSBA in education and the Provincial Network in developmental services) did not hold exclusive bargaining rights for their constitu-ent members. In this model, centrally bargained agreements provide frameworks which must subsequently be bargained by local school boards or community service agencies. Such a centralized bargain-ing structure may not be adequately supported by the capacity and authority to coordinate bargaining strategy.

The third form of conferring bargaining rights to employer associa-tions is through majoritarian accreditation. Under this mechanism, the labour board determines if the association has the support of a major-ity of unionized firms within the designated jurisdiction. The OLRA includes such certification provisions for councils of trade unions:

12. (1) Sections 7 to 15, 126, 128 and 128.1 apply with necessary modifications to an application for certification by a council of trade unions, but, before the Board certifies such a council as bargain-ing agent for the employees of an employer in a bargaining unit, the Board shall satisfy itself that each of the trade unions that is a constituent union of the council has vested appropriate authority in the council to enable it to discharge the responsibilities of a bar-gaining agent. 1995, c. 1, Sched. A, s. 12 (1); 2005, c. 15, s. 3 (1).

However, the OLRA does not include similar provisions for majori-tarian accreditation of employer associations. The board has been reluctant to intervene in matters internal to employer associations.77

Improving the characteristics of employer associations in Ontario’s broader public sector will require additional policy tools to balance the conditions of asymmetrical coordination.

77 See: J.G. Rivard, et al. and Mechanical Contractors Association Ontario (1981). 2 Can LRBR 256.


4.4 Trends in Bargaining Structure in the Public Sector

4.4.1 The Tendency Toward Centralization

In contrast to the decentralization trends in the private sector, bar-gaining in the BPS has become more centralized. Throughout the budget crises of the 1990’s, government enacted constraints to limit the scope of bargaining, restrict the ability of public sector workers to engage in strikes, and pursued more coercive bargaining tactics including legislating the process and outcomes.78 Trends towards centralization should therefore be seen within the historical context “of efforts by the state to use centralization as a mechanism to influ-ence processes and outcomes in order to maintain budgetary control while constraining or minimizing the political costs of public sector labour disputes.”79

Centralized funding mechanisms drive coordination and centraliza-tion in the bargaining structures. Recent trends in bargaining struc-tures in the Ontario BPS have been toward greater coordination and centralization of bargaining structures and practices. Furthermore, where funding mechanisms are centralized, unions tend to coordi-nate bargaining strategies and pressure the funding source, while individual employers typically remain much more fragmented (e.g., in education), and are unable to coordinate; this can lead to asym-metric power and increased costs. This occurred in the 2007 strikes in the developmental services sector when the union was successful in forcing direct negotiations with the funder (government) and employers felt excluded from the settlement. Likewise, managers at school boards are aware of the constraints they face since they no longer control key financial aspects of the bargaining mix.

78 For a discussion of public sector bargaining in the 1990’s see Hebdon and Warrian (1999).

79 See: Sweeney et al. (in press)


4.4.2 Enhancing the Formal Role of Centralized Bargaining in the BPS

Centralized bargaining does not suggest a uniform approach to bar-gaining structures. Nor does centralization require strict standard-ization across existing collective agreements. Local distinctions in job classifications and work practices must be addressed by the local parties. Furthermore, a centralized structure must accommodate the need for local managers and local unions to be engaged in bargaining over local practices that meet local or enterprise-specific requirements. Key considerations in moving to a centralized structure include the optimal scope of bargaining, the timing and coordination between provincial and local bargaining, and transition planning.

Collective bargaining structures and practices are integral to public sector reforms which seek to promote efficiencies, improve value, and limit cost increases. However the stability and effectiveness of labour relations are highly contingent on the quality of the relation-ship between the parties and the quality of leadership in the respective organizations. Optimal collective bargaining outcomes are reached when the parties consciously develop productive and harmonious relationships. There are evolutionary aspects to these shifts in bar-gaining locus in which the internal, or intra-organizational, dynamics will be more challenging than the relationship between the parties. The development of centralized structures will need to be sensitive to these considerations.

4.5 Conclusions

These considerations suggest that:

1. The Ministry of Government Services and the Ministry of La-bour should lead a multi-stakeholder review of bargaining struc-tures with a view towards increasing the level of coordination and centralization.

Systemic change to bargaining structures and practices will re-

quire broad agreement by all parties to a comprehensive plan.


Centralized bargaining may take the form of a master table to

negotiate sector-wide issues of concern (e.g., wages and benefits)

in conjunction with sub-agreements that address issues related

to local practices and distinctions in job structures and work

processes. This two-tier approach provides the flexibility of not

requiring consolidation of bargaining units or standardization of

local terms and practices.

The scope of centrally bargained issues should be limited unless

mutually agreed to by all parties. For example, pensions require

special consideration.

2. Government should empower this multi-stakeholder task force to create tripartite committees in each segment of the BPS with well-defined terms of reference, mandate, scope, and process.

Government should take the lead in capturing the full value of

coordinated, multi-stakeholder forums for on-going discussions

on program delivery, quality assurance, service innovation, and

workforce development.

These labour, management, and government committees would

meet on a regular basis and not just during the cyclical renewal

of collective agreements. Sub-committees of these bodies could

then form the basis of provincial discussion tables and central-

ized bargaining structures.

3. Establish transparent and accountable roles for government in the coordinated bargaining systems based on the principle of engagement.

The principle of direct government engagement throughout the

bargaining process is essential to effect change in BPS bargain-

ing practices and outcomes; attempting to dictate bargaining

outcomes, or setting targets for employers, have not proven ef-

fective.

However, given government’s de facto presence in the bargain-

ing process as funder, a transparent and engaged role is impor-


tant for improving bargaining processes. Furthermore, labour

relations in the BPS have significant implications for the quality

of public services and for achieving policy objectives.

Government presence and engagement in the bargaining pro-

cess does not imply that government would be signatory to col-

lective agreements.

4. Establish, through legislation, mechanisms to support coordi-nation across the BPS and align multi-stakeholder centralized bargaining with centrally funded segments of the BPS.

Depending upon the industry or segment of the BPS, the spe-

cific centralized bargaining framework may be structured along

either occupation-based lines, across an entire (sub) sector, or

through a combination of specific employers and occupations.

For example, in the elementary and secondary education sectors,

informal Provincial Discussion Tables have facilitated the last two

rounds of bargaining. Currently in the Colleges sector central-

ized bargaining is supported under the Colleges Collective Bargain-ing Act, 2008 and Section 7.1 of the Ontario Colleges of Applied Arts and Technology Act, 2002. Likewise, specific occupations in health,

such as nurses, and specific employer groups, CCACs and LTC

providers, bargain centrally. Community and social service trans-

fer payment agencies, which receive nearly all of their funding

from government, have also experimented with provincial discus-

sion tables and would benefit for more centralized bargaining

structures.

Some segments of the BPS would not be candidates for central-

ized bargaining, but may still benefit from greater coordination

and information sharing. For example, municipal bargaining

units, including fire and police exhibit a high degree of coordi-

nation by unions, but would still not be appropriate for central-

ized bargaining because funding is based on local government

revenues. Likewise, coordination among university administra-

tions and unions are increasing, but provincial funding is part of


a broader mix of revenue sources including student fees.

Thus, even where centralized bargaining would not be appro-

priate, mechanisms to support coordination and effective local

practices, including relevant data collection and analysis would

be beneficial. Transition to centralized bargaining structures

should protect local structures for municipal and other locally

funded segments of the BPS.

5. Establish, through legislation, mechanisms to enable and support employer and union associations. Legislation or similar policy tools are needed to overcome the lack of authority that the vol-untary associations currently face.

For centralized bargaining to be effective, employer and union

associations need to have the capacity and authority to bargain

binding agreements on behalf of their members.

The current model of permissive, voluntary associations may not

provide sufficient support for effective coordination, especially

within the employer community. Employer associations need

to have the capacity and authority to represent an entire sector,

including both union and non-union agencies. Structures which

may result in differentiated government funding support based

on union status has been a major concern among employers in

some segments of the broader public sector.

80 The university sector is not a strong candidate for centralized bargaining due to the unique characteristics which distinguish it from other segments of the BPS. First, there is discretion on the part of universities to establish types of programs as well as the mix of undergraduate, graduate and professional programs, as well as to determine the number and characteristic of the students who attend (unlike health care where all patients are entitled to the service). This, combined with the overall decrease in the role of government transfers, and increasing prominence of alterna-tive revenue sources, contributes to significant differentiation in local conditions and practices across universities. In contrast, in the college sector, there are embedded institutional mechanisms for standardization of programs and diplomas. Bargaining structures should align with the economic conditions and industry characteristics of the sector.


Section 5:

Government Reform of the BPS, Labour Policy, and the Law

5.1 Major Supreme Court of Canada Decisions Shaping Labour Relations Policy

Since the advent of the Charter, there have been a series of labour related court decisions that addressed issues related to “freedom of association” and “freedom of expression.” The first set of decisions, collectively referred to as the “Trilogy,” affirmed that collective bar-gaining and the right to strike was not afforded Charter protection under freedom of association.82 Following the Trilogy, the SCC, in Delisle and Dunmore (in 1999 and 2001, respectively) continued to hold that the right to collectively bargain was not protected by the right of freedom of association.83 The Dunmore case dealt with the rights of agricultural workers to bargaining collectively, and presaged the key case Fraser.

81 Refer to the extensive discussion in: Labour Law Casebook Group. Labour and Employment Law. Eighth Edition. Toronto: Irwin Law, pp.674-739.

82 See Slinn (2010). The Trilogy includes: • Reference re Public Service Employee Relations Act (Alberta), [1987] 1 S.C.R. 313; • Retail, Wholesale and Department Store Union, Locals 544, 496, 635 and 955 v.

Government of Saskatchewan, [1987] 1 S.C.R. 460;• Public Service Alliance of Canada v. Canada, [1987] 1 S.C.R. 424. Slinn (2010) further points out that the 1990 PIPSC decision was consistent with the Trilogy. See: Professional Institute of the Public Service of Canada v. Northwest Territories (Commissioner) (PIPSC), [1990].

83 See: Delisle v. Canada (Deputy Attroney General), (1999) 3 SCR 1016; and Dunmore v. Ontario (Attorney General), (2001) 207 D.LR. (4th) 193. However, Slinn

(2010) suggests that Dunmore represented something of a departure from the Trilogy.


The two recent landmark SCC cases, BC Health Services84 and Fraser85, have altered and redefined the constraints on government as well as their responsibilities with respect to unions and collective bargain-ing and, therefore, to negotiated contracts. In the 2007 BC Health Services decision:

“… the Supreme Court of Canada went much further. It overruled the Trilogy decisions and recognized a constitutional “right” of col-lective bargaining under section 2(d), while leaving open the issue of the right to strike.”

The Fraser decision in 2011 is highly relevant because it directly fol-lowed BC Health Services and further addressed and defined the issue of collective bargaining as a constitutionally protected right.

84 Health Services and Support – Facilities Subsector Bargaining Assn v British Co-lumbia 2007 SCC 27, [2007] 2 SCR 391.

85 Ontario (Attorney General) v. Fraser, 2011 SCC 20, [2011].86 Source: Labour Law Casebook Group. Labour and Employment Law. Eight

Edition. Toronto: Irwin Law, p. 697.


5.2 Government Labour Relations Policy

The Charter challenge in BC Health Services arose because of the impact of the BC governments Bill 29 (Health and Social Services Delivery Improvement Act (2002)). In industrial relations terms, the legislation was claimed to effectively:

• set aside contract clauses (e.g., contracting out; layoffs; job secu-

rity; transfers);

• deprive health care workers of right to bargain over basic terms

of employment (e.g., employment security; layoffs; bumping);

• give the employer the (unlimited) right to transfer or reassign

employees; and where a refusal could be taken as an employee

resignation;

• disproportionately affect women and minority (immigrant)

workers

Placing to one side the legal merits of these claims, in industrial rela-tions terms, the legislation was widely acknowledged as being both highly interventionist and sweeping in its scope. Legally, the legisla-tion was viewed as a direct attack on fundamental employee rights including freedom of association (under S. 2(d) of the Charter), and equality (under S.15 of the Charter). By affording employees a constitutional right to collective bargaining, the effect of the BC Health Services decision would be to constrain government industrial relations policy by defining the model for determining the terms and conditions of employment.

From a policy viewpoint, the Fraser decision is of critical importance because it touches upon the difficult issue of the extent of deference of the courts to the legislature in matters of labour policy. The SCC de-cision represents a substantial departure from the decision rendered in BC Health Services, and in Fraser at the Ontario Court of Appeal.

87 See: Fraser v. Ontario (Attorney-General), 2008 ONCA 760.


For labour relations policy, the Fraser decision defines certain con-straints on governments in undertaking policy actions that affect unionized employees and their collective agreements. In practical terms, the SCC decision in Fraser specifies that a substantive change that is unilaterally imposed on unionized employees (that is signifi-cant to, and materially hinders bargaining) is likely to be held invalid unless the government:

(i) engages in a “meaningful process” of consultation and/or

negotiation with the union(s); and

(ii) that the negotiation be undertaken in “good faith.”

The normal process of collective bargaining would certainly be ex-pected to meet these requirements – as set out by the SCC in Fraser. A problem arises, in the first instance, because governments often want to undertake reforms and/restructuring outside of the normal collec-tive bargaining process; or impose an outcome if the changes sought through collective bargaining do not yield the desired outcome(s). If a government wishes to undertake a process of reform, then it must engage in a process of consultation that is “meaningful” and con-ducted in “good faith”; however, the SCC does not identify a specific process that would meet the burden so a grey area appears to persist.

Under certain circumstances, where a government may choose to effect a change in labour relations policy that substantively affects outcomes related to employees’ terms and conditions of employ-ment, and/or the process under which they were determined, and where this change may be challenged in the courts on grounds that it impinges their fundamental Charter rights (i.e., that it constitutes “substantial interference”), the government actions may be “saved” if it can prove “justification” (i.e., that limits are “reasonable” and “can be demonstrably justified in a free and democratic society” [5.1 of the Charter]).


5.3 Conclusions

1. The recent SCC decisions in BC Health Services and Fraser do hold government actions to a set of standards and, therefore, constraints.

The constraints would affect the reform, or change, process and,

in some cases, may limit the extent of change or re-structuring.

2. The government is not prevented from pursuing a policy program of change. The government is, however, required to meet sev-

eral process burdens and there is no “bright line test” of whether

or not any given process of consultation and negotiation over

change would meet the new requirements.

One example of the kind of process that might be considered

a reasonable one would be: a process that consists of formal

negotiations with the affected unions, conducted in good faith

(as commonly defined under current labour relations regimes)

with a view to achieving an agreement; and a reasonable process

would also provide, in the event of an impasse, for a process of

arbitration by a third party.

3. It is reasonable to expect that any process of reform, including one that took the form outlined above, would be subject to a court challenge; but that is not to imply that governments ought not to actively pursue reforms.

Challenges are to be expected, in part, because the responsibili-

ties/limits of government (legislation) in these matters are not

definitively specified. Rather the law is evolving – and is expected

to continue to evolve – on these issues.


Section 6:

Successor Rights in the Unionized Sector of the BPS

6.1 Successor Rights and Government Reform

Successor rights provide for the orderly succession of employees rights to continue their chosen form of union representation, their rights and obligations under their current collective agreement, and so forth, most frequently in the case of a change in the ownership (typically a “sale” in the private sector and “transfer” in the context of a Crown activity) of a business or part thereof (typically a “business” in the pri-vate sector and “undertaking” in the context of a Crown activity). In essence, successor rights preserve the status of the union and the set of collective bargaining rights and contract outcomes in place under a contract and prevent an attempt to avoid contract obligations or, in the limit, to de-unionize a segment of employees through privatization or a related restructuring of an activity. The government also has a interest in maintaining successor rights because these rights provide stability and continuity in the provision of services.

Successor rights are clearly defined and firmly entrenched and rec-ognized in BPS labour relations context (see, for example, s. 69 of the Crown Employees Collective Bargaining Act, 1993 S.O. 1993, Chapter 38; amendment: 2009, c. 34, Sched. J, s. 27). Successor rights are therefore clearly defined and protected.

Successor rights as currently defined would not, however, necessarily limit the right of the government, for legitimate reasons within its purview of responsibility, to engage in a transfer of an undertaking; successor rights simply require that the government respect succes-sor rights, in so doing. The simple case would be the privatization of a well-defined group of employees, covered under a single collective agreement, where the entire group of employees is transferred along

88 Also see the Public Sector Labour Relations Transition Act, 1997.


with the collective agreement and all related obligations. Even on this “simple” case, two typical issues may arise in practice:

• The first issue arises because employees within a given bargain-

ing unit are so included because they are deemed, collectively, to

form “a unit of employees appropriate for collective bargaining”

(e.g., to have a sufficient and ongoing “commonality of interest”

etc.). Basically, in contemplating a transfer of employees that

involves moving them from one bargaining unit to another, the

“match” to the new bargaining unit would have to be evaluated.

• The second general issue arises when collective agreements have

significant differences in content and/or output, and employ-

ees would in effect experience a substantive change in contract

terms as a consequence of having been transferred; a related

type of issue involves moving employees from one undertaking

to another, and having to address issues such as merging senior-

ity lists, etc. The example of seniority lists is instructive insofar as

it illustrates that a basic issue can lead to an protracted and dif-

ficult merger process (as it did in the extreme case of the Cana-

dian airline industry).

A more complex set of issues arises in relation to successor rights in the case of a restructuring that would require a transfer of an undertak-ing, in which the government also wanted to alter the existing terms and conditions of employment and where a collective agreement is in effect.

This could include the case of re-opening a collective agreement in order to adjust terms/conditions of the contract.

On the face of it, this approach would appear difficult to attain. In this case the constraints imposed by the Fraser decision would likely apply. In principle, the employer would, at a minimum, need to effect change by following a well-defined process that included a “meaning-ful process” of consultation and/or voluntary negotiations with the union(s) and where the negotiations are undertaken in “good faith.”


While the employer could attempt to re-open a contract through voluntary negotiations, if an agreement cannot be achieved, the prospect for successfully unilaterally imposing new terms and condi-tions of employment appear extremely low, especially in view of the SCC decision in Fraser.


6.2 Conclusions

1. Successor rights constrain the government, as employer, in

relation to activities related to the transfer of an undertaking

(and related employees). The constraint affects both the process

undertaken as well as some types of outcomes, related to labour

relations.

2. Respecting orderly succession rights and existing obligations is aligned with the government’s interest in maintaining continuity in service provision.

3. The existence of any constraints does not imply that the govern-ment, as employer, cannot successfully negotiate and complete meaningful structural changes in its operations.


Section 7:

Organizational Effectiveness and Productivity in the BPS

7.1 General Organizational/HRM Challenges

A universal concern in organizations is the efficiency and productivity of the workforce. Two factors underpinning these outcomes are: the nature of the technology; and workforce characteristics and human resource management practices. While labour productivity is a func-tion of both technology as well as the characteristics of the workforce, we take the technology and workforce characteristics as largely given in the short term, so that the main focus here is on the development of human resource management practices that enhance productivity.

Establishing and maintaining highly effective human resource man-agement (HRM) practices is a well-known challenge in very large and complex organizations, such as those that populate the BPS. Organi-zations in the Ontario BPS confront similar, inter-related, challenges with respect to HRM including, variously:

• An ageing workforce, which requires succession planning, the

need for mentoring of younger employees, knowledge transfer

from older to younger workers, emphasis on recruitment.

• The motivation and retention of high productivity individuals.

• The need for effective and meaningful performance manage-

ment focused on the ability of managers and employees to

achieve identifiable results.

89 HRM practices also have a major impact on important non-economic organizational outcomes; as examples, in such areas as employment and pay equity, workplace justice, and employee voice. These outcomes are not the focus of this analysis.


• The need for a comprehensive training and development strat-

egy.

• The need for an effective return-to-work system for employees on

health-related leave.

Meeting these challenges requires that an organization have an over-arching strategy in order to achieve systemic improvements. While some of the changes in management practices will require broad systemic changes, other management problems may be more sector-specific or even organization-specific. An overarching government strategy toward enhancing organizational effectiveness and productivity in the BPS requires a degree of flexibility so as not to attempt to impose a standard approach and set of practices across all organizations.


7.2 Workplace/HRM Practices and Organizational Effectiveness

In the private sector, a great deal of emphasis has been placed upon developing innovative HRM strategies that yield improved organiza-tional outcomes. Specifically, the objective is to develop HRM strate-gies and practices that yield greater organizational performance and therefore higher productivity.

A broad range of innovative strategies and HRM-related practices have emerged in dimensions of employment and work that include: pay systems; forms of work organization; management systems and practices; and employee skills development, among others. The term “high performance” work system has been associated with the imple-mentation of the following more specific classes of HRM practices:

• Flexible forms of work organization;

• Work organization involving teams;

• Substantial ongoing investment in human capital

• Employee involvement mechanisms

• Pay systems that had a variable component and that tended to

link some aspect of performance to pay.

A considerable body of research now exists for Canada and the U.S. on the connection between HRM and other workplace practices, and productivity. (Refer to the research literature in Appendix B.) In an authoritative review of this literature, Gunderson (2002) concluded that, although a variety of methodological limitations suggest that care be taken in evaluating and weighting the results of these stud-ies, positive effects from these types of HR practices have tended to be found where the practices are developed and implemented in combination as a “bundle:”92

90 See: Betcherman and Chaykowski (1996); and Betcherman, McMullen, Leckie and Caron (1994).

91 The research literature in the area of the impacts of various innovative HRM and workplace practices on a variety of outcomes (e.g., turnover; employee satisfaction), and firm performance outcomes; Appendix B provides a non-exhaustive but nonetheless extensive list of this research literature.

92 See Gunderson (2002).


“Most of the new workplace practices such as the job design features associated with high performance work systems, employee involve-ment, pay for performance, compressed workweeks and flex-time, work sharing and job sharing, multi-skill training, diversity man-agement, and workplace well-being programs had positive effects on employees (satisfaction, tardiness, absenteeism, commitment, motivation, effort, performance) which in turn positively affected firm performance, productivity and competitiveness.

Success of the workplace practices was enhanced when they were: (1) combined in clusters or bundles of reinforcing practices, (2) integrated to fit with the overall corporate strategy of the business, (3) supported by managers, supervisors and the union, if present.” Gunderson (2002: iii-iv)

In the public sector, where reforms have sometimes been inspired by private sector examples of success, many major organizations have, over the past several decades, engaged in efforts to reform HRM practices with the goal of improving organizational outcomes (e.g., the comprehensive effort launched in the federal public service in 1989, Public Service 2000 (PS 2000)). Some of the “change” programs undertaken since then have been similarly high profile, and have been both comprehensive and large scale in scope. Given the objective to enhance reform of HRM throughout the BPS, a clear distinction must be made between the appropriate role and approach for government in the Ontario Public Service (OPS) versus organizations in other BPS industries.

Organizations in the BPS have traditionally been labour intensive because of the nature of their outputs (i.e., services). The effective man-agement of human resources is therefore critical to achieving organizational efficiency, especially as demands for high quality services become more exacting and the need for cost-effective provision of public services increases.

The government can directly lead and undertake an HRM reform program for the Ontario Public Service (OPS). The relevant approach in the BPS (outside of the OPS) requires a combination of:


• the setting of broad strategic objectives; • setting of standards to create accountability; and • the provision of resources to support HRM and organizational reform.

The provision of resources (undertaken in conjunction with setting standards and objectives) is important because in many situations the capacity of individual employers to support HRM and organizational reform can be quite limited (small employers in youth justice, and children’s aid, and similar transfer payment agencies, as examples).


7.3 Labour-Relations Practices and Organizational Effectiveness

7.3.1 Inter-dependence of HRM and Labour Relations

Reforms that relate to exempt (i.e., management) employees can be designed and implemented solely by management. In highly union-ized organizations, government HRM-reform initiatives that affect unionized employees can generate labour relations friction when they are undertaken without consultation and/or coordination with the unions.

Many organizations, in effect, tend to treat the human resource man-agement issues as independent of the labour relations process; and in this case management may attempt to develop and implement HRM reform independently, as well. The problem is that this approach tends to blur the distinction between management prerogative and effec-tive implementation. It is worthwhile emphasizing that, while it may be fully within management’s rights to develop and implement HRM reforms, in practice, the effective implementation of HRM reforms in a highly unionized workforce typically requires joint acceptance.

7.3.2 Innovation in Labour Relations

In unionized settings, developing efficient and effective organizational practices associated with labour – management relations are frequently overlooked – and often in favour of (nonunion) HRM practices. However, there is evidence that the gains to developing innovations in the conduct of labour relations can also have a significant positive effect on organizational performance (e.g., turnover, motivation, strike activity).93 Innovations in labour relations can take on many forms, but can include:94

93 See, for example, Freeman, Kruse and Blasi (2008) and Katz, Kochan and Keefe (1987).

94 See: Chaykowski and Grant (1995); Fisher, Ury and Patton (1991); Fisher and Ury (1983); and the Canadian case studies and analysis in Verma and Chaykowski (1999).


• Alternative approaches to management-union communications/

information-sharing;

• Cooperative approaches to relationship-building during the term

of the contract and relating to the management/implementation

of the collective agreement;

• New approaches to relationship-building and conflict resolution

in relation to negotiations (e.g., interest-based negotiations);

• Forum’s for jointly addressing strategic issues;

• Joint committees, consultation, and decision-making.

Achieving effective labour-management relations is also critical to achieving organizational efficiency. The government can directly lead and undertake labour relations innovation and reform for the OPS; in the BPS (outside of the OPS) the government can:

• work towards creating accountability regarding labour relations

practice and outcomes; and

• provide resources to support innovation in the conduct and prac-

tice of labour relations.

Given the critical impact that labour relations has on Ontario’s public policy and fiscal priorities, investments in joint labour-management training programs would provide important long-term returns. Given the diverse characteristics of industries in the BPS, customized pro-grams for specific sub-sectors of the BPS would likely be needed.


7.4 Conclusions

1. Achieving meaningful improvements in organizational effective-

ness and productivity across the BPS is, simply stated, an enor-

mous undertaking that requires a long term strategy and wide-

spread and long term commitment from organizational leaders.

This assessment would hold for any single sub-industry within the

Ontario BPS – notwithstanding the broader objective of consid-

ering systemic efforts across the entire BPS.

Achieving improvements in organizational effectiveness and productivity across the BPS through a “top-down” approach that is driven centrally is highly unlikely to meet with any success given the sheer size and complexity of the entire BPS.

2. A government-led approach that is likely to achieve some of

the desired objectives across BPS industries is one that supports

innovation and the diffusion of best practices at the level of the

organization.

Government-supported reform of public sector management and HRM practices, and of labour relations (LR) practices, re-quires a comprehensive strategy that:

• Sets out common global objectives to be achieved across organi-zations.

• These global objectives could be developed centrally in

consultation with stakeholders across industries, and could vary

according to the requirements of particular industries;

• Supports the development of objectives, and strategies to

achieve those objectives, that are more specific to organizations/

sectors with unique requirements.

• The guiding principle is to support the development of

specific, feasible objectives, and concrete strategies to achieve

them;


• Requires that organizations develop metrics/benchmarks in order to measure progress.

• Specific strategies are required to organize and implement

HRM and labour relations change programs – and any

organizational strategy must have measurable benchmarks; and

• Organizations undertaking specific new initiatives must be held

accountable for the cost of investing in the new initiatives,

which requires a concrete process for measuring progress;

• Creates an HRM/LR investment pool that provides targeted resources to support organizations.

• New resources are required to support the development of

HRM and LR strategies, as well as specific new initiatives within

organizations;

New resources are required:

- Because many small organizations have no budget for HRM/

LR initiatives; and

- So that organizations do not substitute funds from other

budget items to subsidize the new programs that are

developed;

• Improvements in managerial capacity and HR outcomes can

be achieved through investments in HR leadership

development programs targeted to BPS employers.

• Improvements in labour relations outcomes can be supported

by systematically committing resources to joint labour-

management leadership training initiatives.

• Establishes a BPS Centre of Management Excellence with overall

oversight and authority for the reform of public sector manage-

ment.

• A BPS Centre would support a long term strategy by providing

a long-term commitment; a BPS Centre can be funded jointly

by government and by organizations in the BPS.


• A BPS Centre could serve as the vehicle to administer an

HRM/LR investment pool.

• A centrally organized BPS Centre can serve as a clearing-house

for information and results regarding what kinds of

innovations are successful, under what circumstances, and so

forth;

• A BPS Centre can serve the critical function of being a vehicle

for diffusing innovations across organizations and industries

within the BPS.


Appendix A:

Mandated Criteria for Interest Arbitration Awards in Ontario Legislation

Hospital Labour Disputes Arbitration Act:

9. (1) The board of arbitration shall examine into and decide on matters that are in dispute and any other matters that appear to the board necessary to be decided in order to conclude a collective agree-ment between the parties, but the board shall not decide any matters that come within the jurisdiction of the Ontario Labour Relations Board. R.S.O. 1990, c. H.14, s. 9 (1).

Criteria

(1.1) In making a decision or award, the board of arbitration shall take into consideration all factors it considers relevant, including the following criteria:

1. The employer’s ability to pay in light of its fiscal situation.

2. The extent to which services may have to be reduced, in light of the decision or award, if current funding and taxation levels are not increased.

3. The economic situation in Ontario and in the municipality where the hospital is located.

4. A comparison, as between the employees and other comparable employees in the public and private sectors, of the terms and condi-tions of employment and the nature of the work performed.

5. The employer’s ability to attract and retain qualified employees. 1996, c. 1, Sched. Q, s. 2.


Police Services Act:

122. (5) In making a decision or award, the arbitration board shall take into consideration all factors it considers relevant, including the following criteria:


2. The extent to which services may have to be reduced, in light of the decision or award, if current funding and taxation levels are not increased.

3. The economic situation in Ontario and in the municipality.

4. A comparison, as between the employees and other comparable employees in the public and private sectors, of the terms and condi-tions of employment and the nature of the work performed.

5. The employer’s ability to attract and retain qualified employees.

6. The interest and welfare of the community served by the police force.

7. Any local factors affecting that community.

Fire Protection and Prevention Act:

50.5 (1) The board of arbitration shall examine into and decide on matters that are in dispute and any other matters that appear to the board necessary to be decided in order to conclude a collective agree-ment between the parties. 1997, c. 21, Sched. A, s. 3 (1).

Criteria

(2) In making a decision, the board of arbitration shall take into consideration all factors the board considers relevant, including the following criteria:


2. The extent to which services may have to be reduced, in light of the decision, if current funding and taxation levels are not increased.


3. The economic situation in Ontario and in the municipality.

4. A comparison, as between the firefighters and other comparable employees in the public and private sectors, of the terms and condi-tions of employment and the nature of the work performed.

5. The employer’s ability to attract and retain qualified firefighters. 1997, c. 21, Sched. A, s. 3 (1).


Appendix B:

Research Studies Related to HRM and Workplace Practices, and Organization Performance

Appelbaum, E. and R. Batt. 1994. The New American Workplace: Trans-forming Work Systems in the United States. Ithaca, N.Y.: Cornell IR

Press.

Arthur, J. B. 1992. “The Link Between Business Strategy and Indus-

trial Relations Systems in American Steel Minimills.” Industrial and Labor Relations Review. 45: 488-506.

Arthur, J. B. 1994. “Effects of Human Resource Systems on Manu-

facturing Performance and Turnover.” Academy of Management Journal. 37: 670-687.

Bartel, A. 1994. “Productivity Gains from the Implementation of

Employee Training Programs.” Industrial Relations. 33: 441-425.

Bassi, L. and D. McMurrer. 1998. “Training Investment Can Mean

Financial Performance.” Training and Development. 52: 40-42.

Becker, B. E. and B. Gerhart. 1996. “The Impact of Human Re-

source Management on Organizational Performance: Progress

and Prospects.” Academy of Management Journal. 39: 799-801.

Becker, B. E. and B. Gerhart. 1998. “High Performance Work Sys-

tems and Firm Performance: A Synthesis of Research and Mana-

gerial Implications.” Research in Personnel and Human Resources. 16: 53-101.

Black, S. and L. Lynch. 1996. “Human Capital Investments and

Productivity.” American Economic Review. 86: 263-267.


Blasi, J., M. Conte and D. Kruse. 1996. “Employee Stock Ownership

and Corporate Performance Among Public Companies.” Indus-trial and Labor Relations Review. 50: 60-79.

Fernie, S. and D. Metcalf. 1995. “Participation, Contingent Pay,

Representation and Workplace Performance: Evidence from

Great Britain.” British Journal of Industrial Relations. 33: 379-415.

Huselid, M. A. 1995. “The Impact of Human Resource Manage-

ment Practices on Turnover, Productivity, and Corporate Finan-

cial Performance.” Academy of Management Journal. 38: 635-672.

Ichniowski, C., K. Shaw and G. Prennushi. 1997. “The Effects of Hu-

man Resource Management Practices on Productivity: A Study of

Steel Finishing Lines.” American Economic Review. 87: 291-313.

Ichniowski, C. et al. 1996. “What Works at Work: Overview and As-

sessment.” Industrial Relations. 35: 299-333.

Kalleberg, A. and J. Moody. 1996. “Human Resource Management

and Organizational Performance.” in Organizations in America: Analyzing their Structure and Human Resource Practices. Thousand

Oaks, CA.: Sage.

Kling, J. 1995. “High Performance Work Systems and Firm Perfor-

mance.” Monthly Labor Review. 118: 29-36.

Lanoie, P., F. Raymond, and B. Shearer. 1996. “Work sharing and

Productivity: Evidence from a Natural Experiment.” CIRANO -

Scientific Series 96s-06. Montreal.

Lawler III, E. E. 1971. Pay and Organizational Effectiveness: A Psycho-logical View. New York: McGraw-Hill.

Lawler III, E. E. 1988. “Pay for Performance: Making it Work.”

Personnel. 65: 22-27.

MacDuffie, J. P. 1995. “Human Resource Bundles and Manufactur-

ing Performance: Organizational Logic and Flexible Production


Systems in the World Auto Industry.” Industrial and Labor Rela-tions Review. 48: 197-221.

Schein, V. E., E. H. Mauner and J. F. Novak (1977). “Impact of flex-

ible working hours on productivity.” Journal of Applied Psychology. 62: 46-56.

Weber, C. (1994). Effects of Personnel and Human Resource Practices on Firm Performance: A Review of the Literature. Kingston, ON: IRC

Press.


Appendix C:

Source Document

This source document (sections 1 - 4) records and references all sup-porting source materials (published sources or other third-party infor-mation) referenced and consulted in the preparation of this report.

1. Economic and Labour Market Data

(i) Wage Settlement:

Wage Settlement increases 1985-2008: 1999 Ontario Economic

Outlook and Fiscal Review. 1999. Ontario: Ministry of Finance.

Appendix, p. 93, Table 23; and 2009 Ontario Economic Out

look and Fiscal Review Economic Data Tables. 2009. Ontario:

Ministry of Finance. Table 26.

Wage Settlement Increases 1983-1984: Ontario Collective Bar

gaining Review. 1988. Ontario: Ministry of Labour. Table 5.

Wage Settlement Increases 1985-2008: Collective Bargaining

Highlights. 2010. (March) Ontario: Ministry of Labour.p.2.

(ii) Employment by Industry: 1999 Ontario Economic Outlook

and Fiscal Review. 1999. Ontario: Ministry of Finance. pp.

96,97, Table 26; and

2009 Ontario Economic Outlook and Fiscal Review Economic

Data Tables. 2009. Ontario: Ministry of Finance. Table 23 & 29.

(iii) Public Sector Employment: 2005 Ontario Economic Outlook

and Fiscal Review Annex VI Economic Data Tables. 2005.

Ontario: Ministry of Finance. Table 24; and

2009 Ontario Economic Outlook and Fiscal Review Economic

Data Tables. 2009. Ontario: Ministry of Finance. Table 23.


(iv) GDP: Ontario Ministry of Finance. From: Office of Economic

Policy, Ontario Ministry of Finance and Statistics Canada.

[ONTARIO REAL GROSS DOMESTIC PRODUCT,

EXPENDITURE-BASED; Millions of chained (2002) dollars; %

Change in real GDP from previous year];

(v) GDP per Capita and GDP per Employee: Ontario’s Long

-Term Report on the Economy. 2010. Ontario: Ministry of

Finance. p. 40, Table 6.


2. Bargaining Structure Resources

Employer Associations

Association of municipalities of Ontario - http://www.amo.on.ca/AM/Template.cfm?Section=Home

Association Franco-Ontarien des ConseilsScolairesCatholique - http://www.afocsc.org/

Ontario Agencies Supporting Individuals with Special Needs - http://www.oasisonline.ca/

Ontario Association of Children’s Aid Societies - http://www.oacas.org/

Ontario Catholic School Trustees Association - http://www.ocsta.on.ca/

Ontario Long Term Care Association - http://www.oltca.com/

Ontario Municipal Human Resources Association - http://www.omhra.ca/en/

Ontario Public School Boards Association - http://www.opsba.org/

Ontario Hospital Association - http://www.oha.com/Pages/Default.aspx

Unions

CUPE Ontario - http://cupe.on.ca/

Health care - http://cupe.on.ca/s18/health-care

Municipal - http://cupe.on.ca/s23/municipal

School board - http://cupe.on.ca/s24/school-board

University - http://cupe.on.ca/s36/university

Ambulance committee of Ontario - http://www.caco.cupe.ca/

ONA - http://www.ona.org/

Hospitals - http://www.ona.org/ona_members/hospital.html

Long Term Care - http://www.ona.org/ona_members/ long_term_care.html

Public Health - http://www.ona.org/ona_members/ public_health.html


Clinics and Industry - http://www.ona.org/ona_members/ clinics_industry.html

CCACs - http://www.ona.org/ona_members/community/ community_care_access_centres.html

Home Care - http://www.ona.org/ona_members/community/ home_care_providers.html

OPSEU – http://www.opseu.org/

OPS - http://www.opseu.org/ops/index.htm

Education - http://www.opseu.org/education/index.htm

Health care - http://www.opseu.org/bps/health/splash.htm

Social services - http://www.opseu.org/bps/social/index.htm

Justice - http://www.opseu.org/bps/justice/index.htm

Liquor board - http://www.opseu.org/lbed/index.htm

SEIU

Hospitals - http://www.seiulocal1.org/hospitals/Default.aspx

Home care - http://www.seiulocal1.org/homecare/Default.aspx

Community services - http://www.seiulocal1.org/ communityservices/Default.aspx

Nursing Homes - http://www.seiulocal1.org/longtermcare/ Default.aspx

Retirement homes - http://www.seiulocal1.org/ retirementhomes/Default.aspx

Police Association of Ontario - http://www.pao.ca/public_interface_1.php

Ontario Professional Firefights’ Association - http://www.opffa.org/enter.php#top

Ontario Coalition of Hospital Unions - http://www.ochu.on.ca/

British Columbia

Community and Social Services Employers Association - http://www.cssea.bc.ca/


3. Roundtable on Potential for Reform of the Conduct and Structure of Labour Relations in the Ontario Broader Public Service (BPS), at 1 pm – 4 pm on Tuesday, September 27, 2011, School of Policy Stud-ies, Queen’s University, Kingston, Ontario

The researchers hosted a roundtable meeting, including industrial relations experts, to discuss innovative ideas for reform and emerging policy findings and recommendations of the research project.

Participants:

Don Drummond Chair, Commission on the Reform of Ontario’s

Public Services

Scott Thompson ADM – Finance, Ontario Public Service

Kevin Banks Faculty of Law

Richard Chaykowski (Co-organizer), School of Policy Studies

Murray Chitra School of Policy Studies

Glenda Fisk School of Policy Studies

Robert Hickey (Co-organizer), School of Policy Studies

Rick Jackson School of Business

Jacoba Lilius School of Policy Studies

Sara Slinn Faculty of Law, Osgoode Hall Law School

George Smith Senior Fellow, School of Policy Studies

John Staple Senior Fellow, School of Policy Studies

Agenda:

Introductions Richard Chaykowski

Background Comments Don Drummond

Moderated Discussion of Themes and Issues

Richard Chaykowski and Robert Hickey


Roundtable Discussion Themes:

Theme 1. Current Processes

Are there alternatives to the current processes in the industrial rela-tions system in the Ontario Broader Public Sector (BPS) that would support lower labour cost increases, including alternative approaches to settlements and interest arbitration?

Areas to consider include the bargaining process; methods of dispute resolution; and the role and scope of issues within the purview of interest arbitrators in the Ontario BPS.

• Can the interest arbitration process be made more efficient?

• Do arbitrators simply follow (pattern) previous settlements?

• Is access to arbitration too easy?

• Is “ability to pay” a reasonable criterion for arbitrators to con-

sider?

Theme 2. Addressing Structural Issues and Successor Rights

Are there structural issues (e.g., successor rights) that would impact the objective of achieving fiscal restraint in the Ontario BPS?

Would policy initiatives to reconfigure the structure and processes of labour relations, or reforms that would lead to greater fiscal ef-ficiencies, be impeded by structural factors such as successor rights?

Are there structural impediments to reforms that would increase flexibility in labour (including greater flexibility by increasing reas-signment, selective downsizing, and so forth)?

Do successor rights impede the ability of the government to devolve services to the private sector?

Theme 3. Collective Bargaining Structures

Are there specific alternatives to the current collective bargaining structures in the Ontario BPS, including the structure of collective bargaining units, and the degree of employer coordination in collec-tive bargaining, that affect bargaining outcomes in Ontario?


• Is the relatively fragmented bargaining structure conducive to

higher settlements?

• Could alternative structures and approaches yield compensa-

tion increases that are more aligned with economic growth (e.g.,

systemically lower wage increases during periods of slow growth

or recession)?

• If so, what specific structures would be required?

• What is the scope for coordinated bargaining to increase effi-

ciencies and yield lower wage increases?

Theme 4. Ontario Government Policy and the Law

What is the likely impact of recent SCC decisions (including BC Health Services and Fraser) on the government’s ability to undertake reforms and the scope and reach of government policy reforms in Ontario?

• What constraints are these decisions likely to impose on Ontario

government policy related to industrial relations and collective

bargaining in the BPS?

4. References and Works Consulted

Adams, G. 1981. “The Ontario Experience with Interest Arbitra-

tion: Problems in Detecting Policy.” Relations industrielles. Vol. 36,

No.1 pp. 225-250.

Addison, J. and C.Schnabel (editors). 2003. International Handbook of Trade Unions. Cheltenham UK: Edward Elgar.

Adell, B., M. Grant, and A. Ponak. 2001. Strikes in Essential Services. Kingston, ON: Queen’s University Press.

Anderson, J. 1982. The Structure of Collective Bargaining .In

Anderson and Gunderson (Eds.) Union management relations in Canada. Scarborough, Ontario: Addison-Wesley, 457-481.

Anderson, J. and T. Kochan. 1977. “Impasse Procedures in the

Canadian Federal Service: Effects on the Bargaining Process.”

Industrial and Labor Relations Review. Vol. 30, No. 3 (April). pp.

283-301.


Anderson, J. and T. Kochan. 1977. “Collective Bargaining in the

Public Service of Canada.” Relations industrielles. Vol. 32, No. 2 pp.

234-249.

Appelbaum, E. and R. Batt. 1994. The New American Workplace: Trans-forming Work Systems in the United States. Ithaca, N.Y.: Cornell IR

Press.

Arthur, J. B. 1992. “The Link Between Business Strategy and Indus-

trial Relations Systems in American Steel Minimills.” Industrial and Labor Relations Review. 45: 488-506.

Arthur, J. B. 1994. “Effects of Human Resource Systems on Manu-

facturing Performance and Turnover.” Academy of Management Journal. 37: 670-687.

Bacharach, S. B. and E. J. Lawler. 1984. Bargaining: Power, Tactics, and Outcomes. San Francisco, Josey-Bass.

Baldwin, J. and W. Gu. 2009. Productivity Performance in Canada,

1961 to 2008: An Update on Long-term Trends. The Canadian Productivity Review. Statistics Canada Catalogue no. 15-206-X, no.

025

Bartel, A. 1994. “Productivity Gains from the Implementation of

Employee Training Programs.” Industrial Relations. 33: 441-425.

Bassi, L. and D. McMurrer. 1998. “Training Investment Can Mean

Financial Performance.” Training and Development. 52: 40-42.

Bauer, D. 1990. “Does Decentralized collective bargaining promote

wage restraint? The Case of Israel.” Industrial and Labor Relations Review, 43(3): 636-649.

Becker, B. E. and B. Gerhart. 1996. “The Impact of Human Re-

source Management on Organizational Performance: Progress

and Prospects.” Academy of Management Journal. 39: 799-801.


Becker, B. E. and B. Gerhart. 1998. “High Performance Work Sys-

tems and Firm Performance: A Synthesis of Research and Mana-

gerial Implications.” Research in Personnel and Human Resources. 16: 53-101.

Bernard, A.. 2009. “Trends in Manufacturing Employment.” Perspec-tives on Labour and Income. Statistics Canada Cat. No. 75-001-X.

Betcherman. G., and R. Chaykowski. (1996) The Changing Workplace: Challenges for Public Policy. Research Paper R-96-13E. Ottawa: Hu-

man Resources Development Canada.

Betcherman, G., K. McMullen, N. Leckie, and C. Caron. (1994) The Canadian Workplace in Transition. Kingston, ON: IRC Press, Indus-

trial Relations Centre, Queen’s University.

Black, S. and L. Lynch. 1996. “Human Capital Investments and

Productivity.” American Economic Review. 86: 263-267.

Blasi, J., M. Conte and D. Kruse. 1996. “Employee Stock Ownership

and Corporate Performance Among Public Companies.” Indus-trial and Labor Relations Review. 50: 60-79.

Carter, D. D. 1974. “Legal Regulation of Collective Bargaining in

the Ontario Public sector.” Relations industrielles. Vol. 29, No. 4

pp. 776-783.

Chamberlain, N. and J. Kuhn. 1986. Collective Bargaining, 3rd edition.

New York: McGraw-Hill Book Company.

Chaykowski,R. 2009. “Collective Bargaining: Structure, Process and

Innovation.” In M. Gunderson, and D. Taras, Eds., Canadian Labour and Employment Relations. Sixth Ed. Toronto: Pearson. Pp.

246-282.

Chaykowski, R. 2002. “Globalization and the Modernization of

Canadian Labour

Policy.” Canadian Public Policy. Vol. 28, No. 1 (March) pp.81-91.


Chaykowski, R. ed., 2001. Globalization and the Canadian Economy: The Implications for Labour Markets, Society and the State. Kingston,

ON: School of Policy Studies, Queen’s University.

Chaykowski, R. 1995. “Union Influences on Labour Market Out-

comes and Earnings Inequality,” In Labour Market Polarization and Social Policy Reform, Edited by K. Banting and C. Beach. Kingston:

Queen’s University School of Policy Studies, pp. 95-118.

Chaykowski, R. and G. Slotsve. 1996. “Union Wage Premiums and

Union Density in Canada and the U.S.” Canadian Business Eco-nomics. Vol. 4, no.3, pp. 46-59.

Chaykowski, R. and M. Grant. 1995. “From Traditional to Mutual

Gains Bargaining.” Collective Bargaining Review. Ottawa Ont.: Hu-

man Resources Development Canada (May), pp. 79–88.

Chaykowski, R., J. Cutcher-Gershenfeld, T. Kochan, and C.S. Mer-

chant. 2000. Facilitating Conflict Resolution in Union-Management Relations: A Guide for Neutrals. Ithaca, NY: Cornell University ICR

and Kingston, ON: Queen’s University IRC Press. (SPIDR Track

II ADR in the Organized Workforce) 34p.

Chaykowski, R. and A. Verma. 1992. Industrial Relations in Canadian Industry. Toronto: Holt Rinehart, and Winston.

Coté, S. 2005. “Population Aging and Labour Market Reforms in

OECD Countries: Key Insights For Canada”, Working Paper Se-

ries 003, Ottawa: Policy Research Initiative.

Currie, J. and S. McConnell. 1991. “Collective Bargaining in the

Public Sector: The Effect of Legal Structure on Dispute Costs

and Wages.” American Economic Review. 81 (4): 693-718.

Currie, J. and S. McConnell. 1996. “Collective Bargaining in the

Public Sector: Reply.” American Economic Review. 86 (1): 327-28.

Currie, J. 1994. “Arbitrator Behavior and the Variances of Arbitrat-

ed and Negotiated Wage Settlements.” Journal of Labor Economics. Vol. 12, No. 1 (January) pp. 29-40.


Dachis, B. and R. Hebdon, R. 2010. “The Laws of Unintended

Consequence: The Effect of Labour Legislation on Wages and

Strikes.” C.D. Howe Institute Commentary No. 304 (June).

Dodge, D. 2010. “Canadian Fiscal and Economic Policies: Where to

From Here?” Inaugural Matthews Lecture, Queen’s University.

(March).

Doellgast, V., & Greer, I. 2007. “Vertical Disintegration and the Dis-

organization of German Industrial Relations.” British Journal of

Industrial Relations. Vol. 45, No. 1, pp. 55-76

Ehrenberg, R. and J. Schwartz. 1986. “Public-Sector Labor Mar-

kets.” In Handbook of Labor Markets, Vol. II, O. Ashenfelter and R.

Layard, eds., Amsterdam: North-Holland, pp. 1219–68.

Ehrenberg, R, R. Smith and R. Chaykowski. 2004. Modern Labour Economics: Theory and Public Policy (Canadian Edition). Toronto:

Pearson.

Ehrenberg, R. and R. Smith. 1994. Modern Labor Economics. New

York: Harper Collins.

Fang, T. and A. Verma. 2002. “Union Wage Premium. Perspectives on Labour and Income. (September) Statistics Canada - Catalogue no.

75-001-XIE. pp. 14-19.

Fernie, S. and D. Metcalf. 1995. “Participation, Contingent Pay,

Representation and Workplace Performance: Evidence from

Great Britain.” British Journal of Industrial Relations. 33: 379-415.

Finkelman, J. 1976-77. “Public Sector Bargaining: Some Basic Con-

siderations.” Queen’s Law Journal. Vol. 17. pp. 17-37.

Finkelman, J. and S. Goldenberg. 1983. Collective Bargaining in the Public Service: The Federal Experience in Canada. Montreal: Institute

for Research on Public Policy.

Fisher, R. and W. Ury. 1983. Getting to Yes: Negotiating Agreement With-out Giving In. New York, NY: Penguin Books.


Fisher, R., W. Ury, and B. Patton. 1991. Getting to Yes: Negotiating an Agreement Without Giving In, 2nd Edition. New York: Houghton

Mifflin Company.

Freeman, R. 1981. “The Effect of Trade Unions on Fringe Benefits.”

Industrial and Labor Relations Review. Vol. 34 pp. 489-509.

Freeman, R., D. Kruse and J. Blasi. 2008. “The same yet different:

Worker Reports on Labour Practices and Outcomes in a Single

Firm Across Countries.” Labour Economics. Vol. 15 pp. 750–771.

Freeman, R. and James L. Medoff. 1981. “The Impact of the Per-

centage Organized on Union and Nonunion Wages.” The Review of Economics and Statistics. Vol. 63, No. 4 (Nov), pp. 561-572.

Gunderson. M.. 2002. Rethinking Productivity from a Workplace

Perspective.” (May) CPRN Discussion Paper No. W|17. Ottawa:

Canadian Policy research Networks.

Gunderson, M. 1979. Earnings Differentials Between the Public

and Private Sectors.” Canadian Journal of Economics. Vol.12, No.

2.pp. 228-242.

Gunderson, M., R. Hebdon, and D. Hyatt. 1996. “Collective Bar-

gaining in the Public Sector.” American Economic Review. 86 (1):

315-26.

Gunderson, M., D. Hyatt and C. Riddell. 2000. “Pay Differences be-

tween the Government and Private Sectors: Labour Force Survey

and Census Estimates.” Human Resources in Government Series

CPRN Discussion Paper No. W|10 (February) (Ottawa: Canadian

Policy Research Networks).

Gunderson, M. and D. Hyatt. 1996.”Canadian Public Sector Em-

ployment Relations in Transition.” In D. Belman, M. Gunderson

and D. Hyatt, eds., Public Sector Employment in a Time of Transition.

Madison WI: Industrial Relations Research Association. pp. 243-

281.


Hebdon, R., and M. Mazerolle. 2003. “Regulating Conflict in Public

Sector Labour Relations.” Industrial Relations. 58 (4): 667-86.

Hebdon, R. and R. Stern. 2003. “Do Public Sector Strike Bans Re-

ally Prevent Conflict?” Industrial Relations. (July): 493-512.

Hebdon, B. and P. Warrian. 1999. “Coercive Bargaining: Public

Sector Restructuring Under the Ontario Social Contract, 1993

– 1996.” Industrial and Labor Relations Review. Vol. 52, No. 2, pp.

196-212.

HRSDC. 2008. Supporting and Engaging Older Workers in the New Economy. Report of the Federal Expert Panel on Older Workers.

Huselid, M. A. 1995. “The Impact of Human Resource Manage-

ment Practices on Turnover, Productivity, and Corporate Finan-

cial Performance.” Academy of Management Journal. 38: 635-672.

Ichniowski, C., K. Shaw and G. Prennushi. 1997. “The Effects of Hu-

man Resource Management Practices on Productivity: A Study of

Steel Finishing Lines.” American Economic Review. 87: 291-313.

Ichniowski, C. et al. 1996. “What Works at Work: Overview and As-

sessment.” Industrial Relations. 35: 299-333.

Kalleberg, A. and J. Moody. 1996. “Human Resource Management

and Organizational Performance.” in Organizations in America: Analyzing their Structure and Human Resource Practices. Thousand

Oaks, CA.: Sage.

Katz, H. 1993. “The Decentralization of Collective Bargaining: A

Literature Review and Comparative Analysis.” Industrial and Labor Relations Review. Vol. 47, no. 1 (October), pp. 3–22.

Katz, H. C., T. A. Kochan and J. H. Keefe (1987). Effects of Indus-

trial Relations on Productivity: Evidence from the Automobile

Industry. Brookings Papers on Economic Activity. 3.

Katz, H., W. Lee, and J. Lee. 2004. The New Structure of Labor Rela-tions: Tripartism and decentralization. Ithaca, New York: ILR Press.


Kling, J. 1995. “High Performance Work Systems and Firm Perfor-

mance.” Monthly Labor Review. 118: 29-36.

Kochan, T., Katz, H. , & McKersie, R. 1994. The Transformation of American Industrial Relations. Ithaca, N.Y.: ILR Press.

Kornfeld, R. 1993. “The Effects of Union membership on Wages

and Employee Benefits: The Case of Australia.” Industrial and Labor Relations Review. Vol. 47, No. 1 pp. 114-128.

Labour Law Casebook Group. Labour and Employment Law. Eight

Edition. Toronto: Irwin Law, pp. 486-487.

Lanoie, P., F. Raymond, B. Shearer (1996). “Work sharing and

Productivity: Evidence from a Natural Experiment.” CIRANO -

Scientific Series 96s-06. Montreal.

Lawler III, E. E. 1971. Pay and Organizational Effectiveness: A Psycho-logical View. New York: McGraw-Hill.

Lawler III, E. E. 1988. “Pay for Performance: Making it Work.”

Personnel. 65: 22-27.

Lewis, H.G. 1988. “Union/Nonunion Wage Gaps in the Public

Sector.” In R. Freeman and C. Ichniowski, eds., When Public Sector Workers Unionize. Chicago: University of Chicago Press. Pp. 169-

194.

Lewis, H. G. 1986. Union Relative Wage Effects: A Survey. Chicago:

University of Chicago Press.

Lewis, H. G. 1963. Unionism and Relative Wages in the United States. Chicago: University of Chicago Press.

Livernash, E. R. 1963.” The Relation of Power to the Structure and

Process of Collective Bargaining.” Journal of Law and Economics. Vol. 6, pp. 10-40.


MacDuffie, J. P. 1995. “Human Resource Bundles and Manufactur-

ing Performance: Organizational Logic and Flexible Production

Systems in the World Auto Industry.” Industrial and Labor Rela-tions Review. 48: 197-221.

Mueller, R. 1998. “Public–private Sector Wage Differentials in

Canada: Evidence from Quantile Regressions.” Economic Let-

ters. Vol. 60, pp. 229-235.

Plowman, D. 1988. “Employer Associations and Bargaining Structu-

res: An Australian Perspective.” British Journal of Industrial Rela-tions. Vol. 26, No. 3, pp. 371-296.

Ponak, A. and L. Falkenberg. 1989. “Resolution of Interest Dis-

putes.” In A. Sethi, ed., Collective Bargaining in Canada. Scarbor-

ough Ontario:

Plowman, D. 1988. “Employer Associations and Bargaining Struc-

tures: An Australian Perspective.” British Journal of Industrial Rela-tions. Vol. 26, No. 3, pp. 371-296.

Rand, I. (Commissioner) 1968. Report of the Royal Inquiry into Labour Disputes. (August 1968) Ivan Rand, Commissioner and E. Pollock,

Counsel.

Renaud, S., 1997. “Unions and Wages in Canada: A Review of the

Literature,” in R. Chaykowski, P-A Lapointe, G. Vallée and A.

Verma, eds., Worker Representation in the Era of Trade and Deregula-tion. Quebec: CIRA, pp. 211-–225.

Rivard, J. et al. and Mechanical Contractors Association Ontario

(1981). 2 Can LRBR. 256

Rose, J. 1995. The Evolution of Public Sector Unionism.” in Public Sector Collective Bargaining in Canada, G. Swimmer and M. Thomp-

son, eds., Kingston ON: IRC Press. pp. 20-52.

Rose, J. 1986. “Legislative Support for Multi-employer Bargaining:

The Canadian experience. Industrial and Labor Relations Review.

40(1), 3 – 18.


Schein, V. E., E. H. Mauner and J. F. Novak (1977). “Impact of flex-

ible working hours on productivity.” Journal of Applied Psychology. 62: 46-56.

Shapiro, D. and M. Stelcner. 1989. “Canadian Public-Private Sector

Earnings Differentials, 1970-1980.” Industrial Relations. Vol.28,

No. 1.pp.72-81.

Sharpe, A. 2010. “Unbundling Canada’s Weak Productivity Perfor-

mance: The Way Forward.” CSLS Research Report 2010-02. (Febru-

ary).

Sharpe, A., C. Bradley and H. Messenger. 2007. The Measurement of Output and Productivity in the Health Sector in Canada: An Overview. CSLA Research Report 2007-06 (December).

Slinn, S. 2010. “Recasting Freedom of Association: A New Trajecto-

ry for Collective Bargaining?” Paper for the Monash University/

RMIT Research Workshop, Collective Bargaining under Aus-

tralia’s Fair Work Act in International Perspective. Melbourne,

23-24 November 2010.

Sossin, L. 2009. “The Puzzle of Independence for Administrative

Bodies.”. Mimeo.

Statistics Canada. 2006. “Unionization.” Perspectives on Labour and Income. (August).

Swan, K. (Chair). 1991. Report of the Arbitration Review Committee to the Minister of Labour. (Toronto, Ontario, October 23, 1991) Jacque-

line Campbell, Norm Carriere, Kenneth P. Swan, Chair.

Sweeney, B., S. McWilliams, and R. Hickey (in press). “The Central-

ization of Collective Bargaining in Ontario’s Public Education

Sector and the Need to Balance Stakeholder Interests.” In S.

Slinn and A. Sweetman (Eds.) Dynamic Negotiation: Teacher labour relations in Canadian elementary and secondary education. Kingston,

McGill-Queen’s University Press.


Swimmer, G. and T. Bartkiw. 2003. “The Future of Public sector Col-

lective Bargaining in Canada.” Journal of Labor Research. Vol.24,

No.4 (Fall). pp. 579-595.

Swimmer, G., and M. Thompson. 1995. “Collective Bargaining in

the Public Sector: An Introduction.” In Public Sector Collective Bar-gaining in Canada, G. Swimmer and M. Thompson, eds., Kings-

ton ON: IRC Press. pp. 1-19.

Thompson, M. and P. Jalette. 2009. “Public Sector Collective Bar-

gaining.” In M. Gunderson and D. Taras, eds., Canadian Labour and Employment Relations. Sixth Ed. Toronto: Pearson. pp. 403-

429.

Verma, Anil and Richard P. Chaykowski, eds. 1999. Contract and Commitment; Employment Relations in the New Economy. Kingston;

IRC Press, Queen’s University.

Walton, R. E. and R. B. McKersie. 1991. A Behavioral Theory of Labor Negotiations: An Analysis of a Social Interaction System, 2nd Edition.

Ithaca, NY: ILR Press.

Winkler, W. 2010. “Labour Arbitration and Conflict resolution:

Back to Our Roots.” Donald Wood Lecture, Queen’s University,

(November 30, 2010).

Weber, C. (1994). Effects of Personnel and Human Resource Practices on Firm Performance: A Review of the Literature. Kingston, ON: IRC

Press.

Wellington, H. H. and R. Winter. 1971. The Unions and the Cities. Washington DC: Brookings Institution.

Zagelmeyer, S. 2007. “Determinants of Collective Bargaining Cen-

tralization: Evidence from British Establishment Data.” Journal of Industrial Relations, 49(2): 227-245.


Appendix D:

Summary of Key Specific Issues and Conclusions


Biographical Information

Richard Chaykowski is Professor in the School of Policy Studies at Queen’s University, where he is currently the MIR Program Director. He is also cross-appointed to the Faculty of Law and a member of the Advisory Board for the Centre for the Study of Law in the Contempo-rary Workplace. Richard Chaykowski received his PhD from Cornell University. He has been a Visiting Scholar at the MIT and a visitor at the University of Toronto and at McGill University. Dr. Chaykowski has also held an appointment as Visiting Chair at Human Resources and Social Development in the federal government, where he was working in Strategic Policy. He also served as the Research Director for the federal government appointed Expert Panel on Older Workers.

Robert Hickey is Assistant Professor in the School of Policy Studies at Queen’s University, where he has taught in the Master of Industrial Relations program since 2006. Professor Hickey earned his Ph.D. from Cornell University’s School of Industrial and Labor Relations. Prior to graduate school, Professor Hickey spent ten years as a union represen-tative and organizer in the Teamsters Union. His teaching focuses on labour-management relations, negotiations and dispute resolution. He is frequently asked to participate in continuing education programs for union representatives and labour relations managers. Professor Hickey’s research interests focus on the impact of economic and public sector restructuring on labour-management relations.

reform of the conduct and structure of labour relations in ...mir.queensu.ca/default/assets/file/(2)...

Documents