On June 5, 2019, the Ontario government tabled Bill 124, known as the “Protecting a Sustainable Public Sector for Future Generations Act, 2019”, which proposes to cap public sector wage increases at an average of one percent annually for the next three years upon the expiration of a collective agreement.  The Bill does not propose implementing a wage freeze.

The legislated cap would affect both unionized and nonunionized workers in various public sector employers, including, among others:

• School boards covered by the Education Act;
• Universities, colleges and other post-secondary institutions
• Hospitals and long-term care homes
• Ornge
• Children’s aid societies

The proposed cap on wages would not apply to judges, municipalities and municipal boards, and any other employees or classes of employees who might be specified by regulation, among others.

As drafted, Bill 124 would not prevent merit-based raises, increases for years of service or increases for professional development (including completing a program or certification), or wage increases already contemplated by current collective agreements.

Already drawing significant ire from various union groups, it is expected that the Bill, if passed, will be subjected to a constitutional challenge, though the Bill itself expressly recognizes the constitutional right to bargain collectively within the available statutory scheme.  Bill 124 is also notable in the fact that it expressly removes the power of the Ontario Labour Relations Board and arbitrators to consider whether the Bill is constitutionally valid or in conflict with the Human Rights Code.

Bill 124 has passed the first reading and is not yet law.

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.