June 20, 2018

Wage Freezes Awarded in Long Term Care Interest Arbitrations in the Municipal Sector

Two recent arbitration awards under the Hospital Labour Disputes Arbitration Act (“HLDAA”), following the principle of replication, have resulted in wage freezes for approximately 1,000 bargaining unit employees represented by two separate unions.
The Employer Municipality in these cases operated five Long Term Care Centres in Ontario.  The Registered Practical Nurses (“RPN”) and other service employees at four of these facilities are represented by the Canadian Union of Public Employees (“CUPE”).  The RPN and other service employees at the remaining Long Term Care Centre operated by this Employer are represented by the United Food and Commercial Workers (“UFCW”).  The Employer and CUPE are also parties to collective agreements for four other bargaining units representing approximately 1,000 employees where the right to strike exists pursuant to the Labour Relations Act.
In collective bargaining in calendar years 2016 and 2017, wage freezes were negotiated as part of an overall compensation package for the four bargaining units with the right to strike.  These agreements were achieved voluntarily without a labour dispute.
In the subsequent Long Term Care negotiations, where the right to strike does not exist and the parties are required to arbitrate their differences under HLDAA, the Employer argued that collective bargaining should replicate the results of the freely negotiated collective agreements with the right to strike bargaining units.  The Unions opposed the replication argument, stating that the Long Term Care sector was unique to itself and replication required that other settlements in the Long Term Care sector be followed rather than the settlements with the same employer where the right to strike existed.
The first of these interest arbitrations involving the CUPE represented employees at four of the Employer’s Long Term Care facilities was held in September of 2017.  The period that was subject to the interest arbitration decision was 2016 and 2017, the same years where the right to strike bargaining units had voluntarily agreed to wage freezes as part of their overall settlement for the period 2015 through to 2018.
At arbitration the Employer argued that the goal of interest arbitration is to establish the terms and conditions which the parties themselves would have fashioned where the right to strike or lock-out exists.
In awarding wage freezes for 2016 and 2017 the arbitrator applied the principle of replication commenting:

“In this case, the results of internal free collective bargaining between these two parties are the most relevant comparators that reflect what may have been achieved in the case before us if these parties freely negotiated an agreement.”

Following this decision, the second arbitration involving the single Long Term Care Centre represented by the UFCW took place.  The period to be covered by the award was also 2016 and 2017.
Again the Employer argued that the principle of replication applied to these employees, notwithstanding the fact that they were represented by a different union, the UFCW.
In awarding the wage freeze for 2016 and 2017 the Arbitrator applied the replication principle, approving the prior award, commenting:

“Indeed, to not recognize this internal comparator as the overriding factor would be to ignore the replication principle that is central to arbitral decision-making.  Simply put, it is highly unlikely that a small minority of this Employer’s long term care employees would have been able to freely bargain better terms and conditions…than those that already apply to the majority of this Employer’s long-term care employees for the same term.”

These decisions represent an important line of jurisprudence supporting the principle that the best comparators at interest arbitration are the settlements bargained by the same parties for other bargaining units of the Employer where the right to strike exists.  This principle continues to be important given that trade unions routinely argue at interest arbitration that settlements outside the particular sector involved in the interest arbitration have nominal relevance.
When bargaining in the context of mandatory interest arbitration strategic considerations need be given to the timing of these negotiations and the timing of negotiations for bargaining units where the right to strike exists.
Cases Cited:
Peel (Regional Municipality) v. Canadian Union of Public Employees, Local 966 (Renewal Collective Agreement), decision of J. Stout, January 22, 2017
Regional Municipality of Peel, Vera M. Davis Community Care Centre and the United Food and Commercial Workers Union, Local 175, decision of K. Burkett, June 7, 2018
Please contact Shawn Adkins for copies of these decisions.
If you have any questions about this topic or any other questions relating to workplace law, please do not hesitate to contact a Mathews Dinsdale lawyer directly for more assistance.