REPORT
TO COMMITTEE(S) OF COUNCIL
INTERNAL ROUTING CHECKLIST
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Corporate
Services and Economic Development Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
19 February 2009 / le 19 février
2009
Submitted by/Soumis par : Kent Kirkpatrick,
City Manager/Directeur des services municipaux
Contact Person/Personne ressource : M. Ric k
O’Connor,
City Clerk and Solicitor/Greffier et Chef du contentieux.
(613)
580-2424 x21215, rick.oconnor@ottawa.ca
SUBJECT:
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OBJET :
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That the
Corporate Services and Economic Development Committee and City
Council receive this report for information.
Que le Comité des services organisationnels et
du développement économique et le Conseil municipal prennent connaissance du
présent rapport.
Following the
conclusion of the 52 day strike by the Amalgamated Transit Union Local 279 (the
“ATU”), City Council at its meeting on January 30th, 2009, directed
staff to investigate and report back on “the options available, legislative or
otherwise to have the OC Transpo service declared as an essential service to
minimize or avoid future transit disruptions.” The purpose of this report is to
outline for Committee and Council the options available, as well as to identify
the potential implications associated with such an essential services designation.
Generally
speaking, the most traditional of the various strike-arbitration models in
labour relations is known as the “Unfettered Strike Model”. Under this model, the parties can strike or
lockout as soon as they are legally entitled to do so – once the collective
agreement has expired and the parties have been unable to negotiate a renewal
agreement. This is the labour relations
model that currently exists between the ATU Local 279
and the City (via
OC Transpo)
currently have.
However, there currently existare
two primary models for the designation of “essential services”: the aptly titled “Essential Services Model”
and the “Limited Designation Model”.
(a) Limited
Designation Model (Mutual Agreement)
In the case of
OC Transpo and other services governed by the Canada Labour Code (the “Code”),
this approach to designating a service as “essential” may best be described as
a “limited designation model” which operates as a partial restriction on the
unfettered strike model. In the federal
sphere, the Code contemplates mutual
discussion and negotiation between an employer and a union on the extent of the
facilities and services that must be maintained during a strike or lockout necessary to prevent an immediate and
serious danger to the safety or health of the public. Should they fFailing to reach such
an agreement, the Canada Industrial Relations
Board (the “Board”) may, at the request of one of the parties or, as was seen
recently in the case of OC Transpo, at the instance of the federal
Federal Minister of Labour, decide the
question. A similar model is in place in Quebec, which has established an
Essential Services Commission to stand in the same place as the Board, though
at the provincial level.
(b) Essential Services Model (Legislation)
This is the model in place in most emergency service sectors, such as police and fire. In Ontario, such services are generally governed by separate legislation, such as the Police Services Act and Fire Protection and Prevention Act, which absolutely prohibit workers from withdrawing their services in support of collective bargaining demands. Inherent in this model is the view that any reduction in the level of such services may endanger public health and safety and thus no strikes or lockouts are tolerated. Given the types of industries regulated at the federal level, this model is largely reserved to provincially-regulated services.
Given the comments above, there exist two means by which OC Transpo could be designated as an essential service:
(1) Mutual agreement between OC Transpo and ATU; or
(2) Legislation.
Each of these options will be discussed below.
(1) Mutual Agreement
In order to
achieve a designation that would preclude some (but likely not all) future
labour disruptions, the City and ATU would need to reach an agreement that all,
or at least a significant portion, of the OC Transpo service would be continued
even if the parties were unable to settle the terms of an existing collective
agreement. An agreement preserving the entire OC Transpo service, which would
amount to an outright prohibition on strikes, would necessarily require the
parties to submit any collective bargaining dispute to binding arbitration.
This kind type
of arrangement is currently in place with the City’s largest bargaining
agent, CUPE Local 503.
A more limited
agreement would presumably allow a strike or lockout in respect of some parts
of the service, with only the “essential”
portions of the service continued. Such is the arrangement that has been
reached with the Sociéetée de Transport de Montréeal (the “STM”).
By May 2007,
Montreal has had
experienced its 15th transit strike in 40 years. It was through the Province of Quebec’s
Essential Services Commission that the STM obtained a limited,
essential service designation that requires the continuation of transit
service during the peak rush hour, as well as for a brief duration around
midnight. The order in the STM’s case was founded on the fact that, given the
particular character of Montreal’s road network and the significant traffic
congestion caused by the lack of transit service during peak hours, emergency
vehicles were significantly impeded in their response to life-threatening
incidents.
A frank
assessment suggests that there is little probability that the City of Ottawa
would be able to achieve an essential services
designation, whole or partial, through agreement with the ATU. The ATU’s
opposition to any limitation on its members’ constitutional right to strike,
which is it
has asserted emphatically both before the Canada Industrial Relations
Board and in various submissions to the Federal
Federal
Minister of Labour, would appear to preclude a consensual designation.
While the City could have recourse to the review and dispute-resolution
mechanisms set out in the Code,
namely a referral to the Board, recent experience indicates that a result like
that reached in Montreal, would be unlikely.
As noted above,
on December 29th, 2008, the Federal Minister of Labour initiated
just such a review by the Canada Industrial Relations Board and asked it to
examine the question of whether the City of Ottawa and the ATU had maintained
the services necessary to prevent an immediate and serious danger to the safety
or health of the public. During the course of the hearings held in this matter
in January 2009, the evidence made clear that the loss of transit service had
not impacted emergency response times. This was due, in large measure, to the
existence of the City’s Transitway as a road network available for use by
emergency vehicles. As a result, the factors that supported a limited
designation for the City of Montreal did not exist to sustain a similar
designation under the Canada Labour Code. Further, while there was a
significant volume of anecdotal evidence of personal hardship provided to the
Board in response to its request for public submissions, there was no clear
evidence that these difficulties rose to the very high level contemplated by
the Code, being “an immediate and
serious danger to the
health or safety or health of the public.”. As such, the Board ultimately determined
that no additional service had to be maintained by the parties. A copy of the Board’s decision is attached
as Document 1.
(2)
Legislation
Against the backdrop set out above, it would appear that the only viable option available to the City is to seek special legislation declaring OC Transpo as an essential service, thereby prohibiting strikes or lockouts. This was the situation that confronted Toronto City Council in 2008, when it embarked on a review of this option following a short strike by the ATU Local 113 in April 2008. A summary of the Toronto response is likely instructive in this instance.
Following a 36- hour ATU strike in April 2008 (which
was ended by the enactment of back-to-work legislation), Toronto City Council
sought to address the same question posed by Ottawa City Council in its January
30th inquiry. Given the impact of the strike, as well as the
possibility of future labour disruptions, Toronto’s Executive Committee asked
the City Manager “to provide a report discussing the options and consequences
of the City formally requesting that the Province of Ontario designate the TTC
as an essential service.”
There were two primary motives underlying this consideration:
1. putting an end to costly and
disruptive transit strikes; and
2. ensuring the continuity of
service to 1.5 million residents who rely on the service daily.
The City Manager’s Report, presented to Toronto City Council and its Executive Committee in the fall of 2008, provided a comprehensive overview of the following: various collective bargaining dispute resolution methods used in Union-Management negotiations in North America; current federal and provincial legislation regarding collective bargaining and essential services; a comparative cost analysis of freely negotiated collective agreements against those established through arbitration; and the economic, health, traffic and environmental impacts on the City of Toronto of a strike at the Toronto Transit Commission. Also included was a report by the Toronto Transit Commission recommending against such a designation, which is an attachment to the City Manager’s Report. Given the comprehensive nature and timeliness of the Toronto Staff Report, it has been attached in its entirely at Document 2.
Following
consideration of this material, Toronto City Council voted 23-22 to reject the
notion of seeking an essential service designation for the TTC. One
factor Uunderlying
this decision were the conclusions reached in a report submitted by the C.D.
Howe Institute entitled “No Free
Ride: The Cost of Essential Services
Designation”, a copy of which is appended to this report at Document
3. The fundamental conclusion of the
C.D. Howe Report is that the overall cost consequences of an essential services designation are too high,
considering that such a designation can neither predict nor prohibit a future
transit strike. In fact, when
canvassing all sectors, the C.D. Howe Report indicates that essential services designations have resulted in
partial strikes that have lasted longer then
than would have been the result in an
unfettered strike situation, where there is pressure on both parties to resolve
the situation matter
and ensure a stable employment situation through free collective
bargaining.
Specifically, the Report provided the following comment:
Canadian evidence suggests that declaring a public service essential
increases the cost of negotiated wage settlements, fuels wage growth across
sectors – and does not guarantee that crucial services will be provided in the
event of a strike.
Based on the
research conducted, the C.D. Howe Report concluded that the effect on the TTC
of an essential service declaration would likely be an increase of up to 0.8
percent in the average hourly wage. In
the case of the TTC, this would amount to an increase in the
annual labour expenditures of $6 million and, over the term of a
three-year contract, of some $23 million dollars. By way of comparison with OC
Transpo, the model developed by the C.D. Howe Institute suggests that the
yearly increases offered by the City of Ottawa in an effort to resolve the
strike, being 3.25%, 3% and 3%, would rise to 3.6%, 3.3% and 3.3%, if awarded
through interest arbitration.
A second C.D.
Howe report entitled, The Side-effects of Essential Services Legislation, which was part of the Institute’s
submission to Toronto’s Executive Committee, further concluded that an essential
services designation does not provide a
safeguard against strike action. This
report identifies that, since 1977, there have been approximately 671 strikes
where an essential services designation applied. In cases where there is an essential services
designation, research showed that strikes are approximately 38% longer than in
similar locations and sectors where such legislation is not in place. When applied to the Toronto situation, for
example, this would mean that instead of approximately 2.5 days affected by
strikes, there would have been 4 days of partial strikes. The report concludes that this is likely due
to the fact that there is less incentive for either the union or the employer
to return to the bargaining table in a partial strike situation because the
costs – both political and economic – are assumed to be lower. This report is attached as Document 4.
Based on the
above, it is apparent that, while an essential services
designation may ostensibly serve to limit the possibility or extent of a strike,
research suggests that such a designation may actually result in more
protracted labour disruptions, though at a lesser scale. In addition, whatever
advantage that an essential service designation may bring could be offset by
the additional costs that experts have attributed to the interest arbitration
model of resolving collective bargaining disputes.
As a means of preventing a recurrence of the recent strike, it has been suggested that the City of Ottawa could cease the operation of routes running into Gatineau, Quebec, with the effect of removing OC Transpo from federal jurisdiction and the Canada Labour Code, as well. While such a move would end OC Transpo’s status as an interprovincial undertaking and bring it within the ambit of the Ontario Labour Relations Act, 1995, it is unclear whether this change would serve any greater purpose in achieving essential service status for the bus operation.
At the outset, it should be noted that transit services in Ontario generally operate on an unfettered strike model. While the Provincial Government was observed to move quickly to legislate Toronto Transit Commission bus drivers back to work after a brief strike in April 2008, bus services generally are not considered essential services in Ontario, unlike police and fire. In this regard, the preamble of the Toronto Transit Resumption Act, 2008 makes clear that the legislation was intended to be a temporary measure, meant to address the specific case of the 2008 ATU strike. Therefore, the Provincial Legislature’s actions in passing this Act cannot be taken as evidencing a desire to make all transit services exempt from the possibility of a strike or lockout. To the contrary, it should be noted that the Provincial Government made no such similar move to legislate striking employees back to work during the 2008 York Region transit strike, nor during the 2006 Durham Region transit strike. Nor can the TTC example be taken as indicative of a quicker provincial response to labour disruptions, generally, as seen in the recent decision to legislate striking York University faculty back to work only after their strike has lasted some twelve weeks.
Furthermore, it is anticipated that the termination of interprovincial bus service could have significant implications in terms of OC Transpo ridership, recognizing the substantial presence of Federal Government offices in Gatineau, as well as a host of other operational issues. Given these anticipated effects, and in the absence of any clear labour advantage, it does not appear that the termination of interprovincial service would assist in preventing future service disruptions at OC Transpo as a result of a strike or lockout.
Both during and following the OC Transpo strike, the question of the privatization of Ottawa’s transit service has been identified as a possible means of avoiding future labour disruptions. Recognizing that there may be operational or governance concerns associated with such a course of action, it should be noted that the privatization of transit service would likely offer no guarantee against a future strike or other labour disruption. The possibility of a strike is inherently tied into the existence of a unionized workforce and is not associated with the nature of the service owner, be it the private or the public sector. In this regard, York Transit, which privatized a portion of its service now operated as Viva Transit, provides a telling example in that the Viva Service was the subject of a strike in 2008 by its workforce, represented by the same ATU local as are TTC operators.
As with the earlier discussion on the merits of termination of interprovincial service, changes to the governance structure of OC Transpo would have little or no effect on the unionized status of its workforce. Therefore, such an option does not serve to eliminate or minimize the likelihood of a future service disruption.
The Financial Services Branch and OC Transpo were consulted in the preparation of this report.
The consideration of this report by Council does not have
any direct Legal/Risk Management concerns.
However, should Council wish to pursue further any of the options
described herein, a more detailed legal/risk
management as well as operational and financial analysis would be
required.
There
are no financial impacts from this report.
If Council decides to make transit an essential service, based on the the
preliminary analysis performed by the C.D. Howe Institute, the future
cost of ATU settlements can be anticipated to increase by an average of 0.3%
every year. With compounding over time
this can create significant budgetary pressures.
Document 1 – Canada Industrial Relations Board Order (January 28, 2009);
Document 2 – City Manager’s Report to Toronto City Council and its Executive Committee (September 2008);
Document 3 - C.D. Howe Institute Report entitled “No Free Ride: The Cost of Essential Services Designation” (September 2008); and
Document 4 – C.D. Howe Report entitled, “The Side-Effects of Essential Services Legislation” (October 2008).
That the Legal Services and Labour Relations staff will implement any decision undertaken by City Council in this matter.