Summary#

Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act, 2019, was enacted as a new Ontario law. It also made related amendments to the Labour Relations Act, 1995 and the Employment Standards Act, 2000; the stated goal was to align public-sector compensation increases with the Province’s fiscal situation and protect public services. The Act sets temporary, three-year limits on compensation increases for covered workers, but the supplied material does not establish whether the Act is still in force.

• For most covered represented workers, collective agreements and arbitration awards cannot set salary-rate increases above 1% for each 12-month period of the moderation period. Other new or increased compensation entitlements are limited to an average of 1% per year across the covered employees.
• Similar limits apply to non-represented employees. Their three-year moderation period generally starts on a date chosen by the employer after June 5, 2019, or on January 1, 2022, whichever comes first. Some employees’ periods follow the period for represented employees.
• The law covers specified Ontario public-sector employers, including the provincial Crown and its agencies, school boards, universities, colleges, hospitals, some long-term-care licensees, Ornge and children’s aid societies. It also applies to Ontario Power Generation and its subsidiaries through related amendments.
• Municipalities, Indigenous communities and specified bodies linked to them are among the exclusions. The Minister may also make regulations exempting employers, employees or collective agreements.
• The Management Board of Cabinet may require employers and employers’ organizations to provide compensation and bargaining information. The Minister may declare an agreement or arbitration award inconsistent with the law; after giving the parties a chance to make written submissions, the Minister may do so.
• The Act preserves the right to bargain collectively and the right to a lawful strike or lockout. It also says it is to be repealed when a specified section comes into force; the supplied material does not say whether or when that happened.

What it means for you#

• Covered public-sector employees: During the applicable moderation period, salary-rate increases and other compensation entitlements are subject to the limits above. The law allows certain salary increases for length of service, performance, or completed education or training. It also makes exceptions for specified pension-contribution changes, approved voluntary exit programs and payments set by regulation.
• Employees with an expired collective agreement: Salary rates generally cannot increase during the moderation period until a new agreement is in operation. The same limited exceptions for service, performance and education or training apply if the expired agreement would have allowed them.
• Employers and bargaining organizations: They must comply with applicable information directives. Employers must not make up, before or after the moderation period, compensation an employee did not receive because of the limits.
• Workers and bargaining organizations: If the Minister declares an agreement or arbitration award inconsistent with the law, it is void under the Act. The parties must return to an earlier bargaining stage or, for an arbitration award, the arbitrator remains responsible for making a compliant award.
• Other Ontarians: The law does not directly change public services, taxes or eligibility for benefits. The stated aim of protecting services is not a guarantee of a particular outcome.

Money#

No cost estimate is available in the supplied material.

• The law does not state a spending amount or provide an estimate of savings or lost revenue.
• Employers may have to provide information when directed, but the material gives no estimate of related staffing or compliance costs.
• The compensation limits may constrain compensation growth; the material does not quantify any resulting savings.

What is unclear#

• No publicly available information in the supplied material establishes whether the Act, or its planned repeal, is currently in force.
• The Labour Relations Act, 1995 and Employment Standards Act, 2000 were not supplied, so I could not verify how the related amendments fit with current versions of those laws.
• The material does not give the regulations or directives that may set exemptions, additional covered employers, or excluded payments.
• It does not say how often the Minister used the power to declare an agreement or award inconsistent, or whether particular workers were exempted.
• The law gives some moderation-period dates by reference to agreements and bargaining events; the supplied material does not give the dates for individual employee groups.

Case for#

• The law appears intended to limit compensation growth during a period the government described as a fiscal challenge. A fixed cap could make the maximum increases clear for employers and bargaining parties.
• A possible argument for the design is that it keeps collective bargaining and lawful strikes in place while limiting compensation increases.
• Exceptions for service, performance and education or training allow some salary increases without removing the overall limits on compensation entitlements.

Case against#

• One concern is that the limits restrict what collective agreements and arbitration awards can provide, even where bargaining parties agree to higher increases.
• The Minister’s power to declare an agreement or award inconsistent can undo its terms. The Act provides a chance for written submissions, but the supplied material does not describe an appeal process.
• The law allows the government to require detailed compensation and bargaining information. The material does not estimate the cost of providing it or explain how often that power would be used.
• The law’s stated goal is to protect public services, but the material does not show that the compensation limits would produce that result.