In another example of the problems with the labour arbitration system, an April 5 award granted wage increases just shy of three per cent to staff at the Ottawa Police Service for 2011 and 2012 even as their municipal colleagues got less through bargaining.
It’s not a striking case as the employer, which proposed 2.5-per-cent increases for both years, was fairly close to the respective boosts of 2.99 per cent and 2.95 per cent put forward by the Ottawa Police Association. At the same time, three per cent is hardly an excessive amount. But as arbitrator Russell Goodfellow pointed out, the union’s proposal amounts to an additional $1 million in costs to the city for each year. In addition, his ruling notes all other city bargaining units in Ottawa that had reached agreements settled for increases of two per cent or less. Those other contracts, then, fell in line with Ottawa council’s directive of limiting pay increases to 2.5 per cent in order to keep property taxes in check.
Goodfellow, however, made the more generous determination on the basis of wage agreements for police in other large municipalities. If he accepted the city’s proposal, Ottawa police would end up “at or very near the back of the pack, behind such forces as Niagara, Durham, and Halton.” Moreover, he found arbitrators aren’t bound by political directives such as the one issued by Ottawa council.
Goodfellow is right. But at a time of limited resources and increased scrutiny on arbitration awards in the public sector, it’s reasonable to consider alternatives. Ultimately, giving greater weight to the employer’s ability to pay, as Ontario Conservative Leader Tim Hudak proposes, can only do so much as governments do have the option of adjusting taxes and spending in order to fund arbitration awards that are, after all, supposed to replicate what a fully bargained deal would look like. But the notion of ability to pay could consider a municipality’s overall tax burden in order to account for cities that keep their levies comparatively low. At the same time, while Goodfellow rightly compared Ottawa police wages to other municipal forces in determining what was fair, it’s also reasonable to consider what the other employees in the same city got as doing so would reflect local employment conditions as well.
At the end of the day, the arbitration system is a difficult area to resolve. The rules requiring comparisons are there for good reason but they unfortunately create a domino effect making it virtually impossible for public-sector employers to significantly reform compensation. When the private sector has moved to defined-contribution pensions, for example, it’s not unreasonable to expect them in government as well. The arbitration system, however, makes that difficult as arbitrators default to mimicking other agreements.
Among the options for reform is a reconsideration of who’s an essential employee. As economist Don Drummond’s report on Ontario public services noted, the percentage of essential employees here is high. So along with Hudak’s proposals, let’s look at that option as well. Taking another look at Toronto’s decision on TTC employees is a good place to start.
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Glenn Kauth
