Report in which the committee requests to be kept informed of development - Report No 318, November 1999

Case No 1943 (Canada) - Complaint date: 12-NOV-97 - Closed

Allegations: Interference by the authorities in the establishment of labour tribunals and arbitration boards

1. 103. The Committee examined this case at its June and November 1998 sessions and, after each of these sessions, presented an interim report to the Governing Body (see 310th Report, paras. 185-242, adopted by the Governing Body at its 272nd Session (June 1998), and 311th Report, paras. 151-169, adopted by the Governing Body at its 273rd Session (November 1998)).
2. 104. The Government sent further observations in a communication dated 16 March 1999.
3. 105. Canada has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). It has not ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), or the Collective Bargaining Convention, 1981 (No. 154).

A. Previous examination of the case

1. 106. During its previous examination of this case, the Committee made reference, inter alia, to Schedule Q to the Savings and Restructuring Act, 1996 (Bill 26) and to the Public Sector Transition Stability Act, 1997 (Bill 136), in particular Schedule A which is the Public Sector Dispute Resolution Act, 1997. The complainants maintain that the legislation and the continued absence of an independent body to appoint, and revoke the appointment of, the members of arbitration tribunals and boards competent in labour disputes in Ontario are prejudicial to the independence and integrity of these bodies and, thereby, are in violation of the standards and principles of freedom of association.
2. 107. During its examination in November 1998, the Committee presented the following recommendations (see 311th Report, para. 169):
   • (a) The Committee requests the Government to provide further information concerning the arbitration outcomes pursuant to Bill 26 and Bill 136, including whether these outcomes replicate those in sectors entitled to the right to strike. The Committee further requests the Government to forward copies of the relevant arbitration awards. It also repeats its request to the complainants to submit further information in this regard.
   • (b) Noting the importance of changes in the bargaining structure, including the arbitration process, to the bargaining parties, the Committee urges the Government to ensure in future that consultations in good faith are undertaken regarding any changes to the bargaining structure, in such circumstances that the parties have all the information necessary to make informed proposals and decisions, and the implementation of the legislation ultimately adopted is facilitated.
   • (c) Concerning the appointment procedure for members of the OLRB, the Committee requests the Government to provide more specific information on the actual consultation process that is undertaken. The Committee also requests the Government to provide specific information on all the cases concerning the removal of OLRB vice-chairpersons and the chairperson raised in the complaint, and to inform it of the basis in law and in practice upon which appointments can be revoked or not renewed. The Committee also urges the Government to make trade unions and employers' organizations an integral part of the process of reviewing the appointment procedure, since it is dealing with an area of particular importance to them.
   • (d) Concerning the process of choosing arbitrators for appointment where the parties cannot agree on an arbitrator, the Committee notes that this matter is presently the subject of litigation, and requests the Government to forward a copy of the decision of the court in this matter as soon as it is rendered.
   • (e) Regretting that the Government has not responded to its recommendation to consult fully with the trade unions and employers' organizations to determine how to strive to promote confidence in arbitration, which is essential to harmonious industrial relations, the Committee urges the Government to do so in the near future, and to keep it informed in this regard.
     • The Government's reply
   • 108. In its communication dated 16 March 1999, the Government states, with regard to the arbitration conducted under Schedule Q to the Savings and Restructuring Act, 1996 (Bill 26) and Schedule A to the Public Sector Transition Stability Act, 1997 (Bill 136), that 110 rulings referring to wage matters were handed down between 30 January 1996 and 31 December 1998 and it supplies copies of these decisions. The Government indicates that the rulings set wages in certain public services such as hospitals, police and fire services and points out that the average wage increases awarded are approximately 1.08 per cent.
3. 109. With regard to the arbitrator appointment procedure, the Government emphasizes that the Ontario Divisional Court, a court of first instance, was called upon to conduct a judicial review of the policy adopted by the Minister of Labour of Ontario, according to which he/she appoints retired judges to preside the arbitration boards whenever the parties cannot reach an agreement. Previously, the chairpersons of such boards were appointed by senior officials to whom the Minister had delegated his powers. The Court handed down its decision on 17 February 1999, throwing out the application for judicial review and stating that it was not the Court's role to evaluate the advisability of ministerial policy but, on the other hand, to verify whether the Minister had exceeded his/her powers in adopting it. The Government supplies a copy of the Court's decision.
4. 110. With reference to the procedure for appointment of members of the Ontario Labour Relations Board (OLRB), the Government points out that the vice-chairpersons of that body are appointed by the Lieutenant-Governor in Council. In practice, the appointments are made for a period of three years. When vacancies occur and recruitment is being envisaged, the selection of candidates is influenced by the concern to establish a balance between experienced members and others who can contribute new outlooks and expertise. For the purpose of maintaining this balance and ensuring continuity, it is current practice for the Lieutenant-Governor to renew vice-chairperson for a new term of office. Given the OLRB's very sound reputation, several qualified and credible candidates wishing to make a contribution to public life and acquire experience in administrative law are willing to become members. Generally, they submit their applications to the competent public body or directly contact the chairperson of the OLRB. Applications may be submitted without any vacancy having been announced. As a rule, the chairperson conducts a preliminary examination of candidates' files. The Cabinet also submits recommendations in the light of the aforementioned criteria. Potential candidates may be interviewed by a committee set up for that purpose. Subsequently, applications are passed on to the Lieutenant-Governor who makes the appointments. It is clear that, whereas it is within the Lieutenant-Governor's powers to make appointments, the chairperson of the OLRB plays a key role and bears influence throughout the selection process.
5. 111. With regard to the information requested on the basis in law upon which the removal and non-renewal of OLRB vice-chairpersons take place, the Government supplies a copy of the decisions pronounced by two Ontario courts in the Hewat case, as well as memoranda it submitted to these bodies. It indicates that these courts conducted a detailed study of the nature of the appointments to quasi-judicial bodies -- such as the OLRB -- and of the possibilities open to the Government to remove, as it saw fit and before the end of their terms of office, members appointed to these bodies for a fixed period. In the Hewat case, the decision to revoke the appointments during the terms of office was annulled by the courts, but the three members concerned were not reinstated in their posts, given that the terms of office of two of the members had expired and that the third post had, in the meantime, been filled. The Government observes that, in this case, the Court did not consider that the OLRB's independence had been impaired and emphasizes that none of the concerned parties lodged an appeal, despite the existence of such an opportunity.
6. 112. Regarding the specific situation associated with the appointment and removal of arbitrators competent in industrial relations, as addressed by the Professional Standards Act and the Occupational Safety and Health Act, as well as of OLRB members, the Government indicates that the functions of the former have been incorporated into those of the OLRB. The four arbitrators in question have ceased dealing with the matters submitted to them but the renewal of their terms of office has not been sought. Nevertheless, the arbitrator who acted as chairperson accepted to remain in that post in order to ensure a smooth transition. Moreover, the Government points out that an agreement was achieved with the three vice-chairpersons of the OLRB, whose terms of office had been terminated prematurely, without grounds, on 2 October 1996 (case Hewat supra). The term of office of one further vice-chairperson expired on 5 September 1997 and has not been renewed, in accordance with the established procedure.
7. 113. Finally, in relation to consultation and participation of workers' and employers' organizations in the selection of OLRB members, the Government states that a committee for the reform of public agencies was set up in May 1997 and this body is, inter alia, called upon to advise the Government regarding the changes which should be made to improve the workings of such agencies to the satisfaction of all concerned parties. In this context, the committee suggested that the Government review the procedure applying to the appointment of chairpersons and members of regulatory and decision-making agencies, in order to ensure that they met the needs of the relevant sectors. The committee conducted extensive consultations with the concerned groups, i.e. consumers, shareholders or workers' and employers' organizations. It published a document sent to 800 persons; almost 200 groups and individuals took part in round tables, presented written contributions or met with the committee's members. The issue of the appointment, qualifications and training of members of such bodies has been raised and has repeatedly been the subject of fierce debate. The committee has also laid special emphasis on this issue and recommended that certain questions and principles undergo consideration when the appointment procedure is reviewed. The Government adds that in 1998 it ordered a revision of the procedure for the appointment of members of public agencies with a view to the adoption in the first quarter of 1999 of a recommendation emanating from the committee's examination of a new policy.

C. The Committee's conclusions

1. 114. The Committee recalls that this complaint contains allegations that the legislation applicable to compulsory arbitration in various areas of the public sector and the continued absence of an independent body to appoint the members of tribunals and arbitration boards competent in industrial disputes in Ontario are prejudicial to the independence and integrity of such tribunals and, thereby, violate the standards and principles of freedom of association.
2. 115. With regard to the outcomes of arbitration conducted in accordance with Schedule Q of the Savings and Restructuring Act, 1996 (Bill 26) and Schedule A of the Public Sector Transition Stability Act, 1997 (Bill 136), the Committee takes good note of the copious documentation on this issue forwarded by the Government. However, the Committee regrets that the complainants did not act upon the recommendation that it presented on its previous examination and that they did not supply more relevant information. The Committee observes that several rulings cover, at least in part, the period during which the Social Contract Act, 1993 (Bill 48) was in force, i.e. between 14 June 1993 and 31 March 1996. Bill 48 was the subject of a report by the Committee (see 292nd Report, paras. 511-554) and contained restrictions applicable to the public sector, as a consequence of which, inter alia, the arbitrators' powers of decision were limited with regard to wage setting. The Committee therefore considers that the arbitration awards in respect of this period are irrelevant for the purposes of evaluating the consequences of the criteria introduced by Bills 26 and 136 for the outcome of the arbitration conducted under these Bills and, in particular, in respect of whether these outcomes replicate those arrived at in sectors where the right to strike is exercised. As regards arbitration covering the period following 31 March 1996, the Committee observes that several arbitration boards state in their decisions that the criteria specified in Bills 26 and 136 are not exclusive and that they may take into consideration all factors that they consider to be relevant. In any event, the criteria listed in Bills 26 and 136 are sufficiently broad to allow them to exercise their competences to the fullest extent. Moreover, the arbitration boards have constantly emphasized that their objective is to endeavour to replicate, to the extent possible, the results of collective bargaining undertaken on a voluntary basis. Therefore, they generally set wages on the basis of a comparative analysis of remuneration awarded by arbitration or obtained through collective bargaining in similar or comparable fields of activity.
3. 116. With reference to the procedure for the appointment of members of the Ontario Labour Relations Board (OLRB), the Committee notes the relevant information supplied by the Government. It also takes note of the rulings handed down by the Ontario courts of first instance and appeal in the Hewat case; these annulled the premature removal of three members of the OLRB; the Committee also notes the settlement subsequently reached to end the disagreement. The Committee recalls that, in this case, the Ontario Court of Appeal stresses that the OLRB must ensure that the general public views the exercise of this body's quasi judicial functions as being entirely independent of government authorities; the Court of Appeal believes that this is the only way of securing respect for the decisions arrived at. Furthermore, the Committee notes the Government's statement to the effect that it wishes to review the procedure for the appointment of members to various administrative and quasi judicial bodies -- including the OLRB. In this regard, the Committee observes that the Government has set up a committee for the reform of public agencies, whose function it is to advise upon the changes that should be made to improve such bodies' workings. In this context, the committee has held extensive consultations with the relevant groups, including workers' and employers' organizations. During such consultations, the issue of the appointment, qualifications and training of members of regulatory or decision-making bodies underwent fierce debate. The Committee recalls that, in the first quarter of 1999, the Government wished to adopt a new policy regarding the appointment of members of public agencies, including the OLRB, in the light of the work conducted by the committee that had been set up. Consequently, the Committee requests the Government to keep it informed of the possible adoption of such a policy and, where appropriate, of its content. In the event of that policy not yet having been implemented, the Committee requests the Government to keep it informed of the measures it intends to take in this respect.
4. 117. With regard to the appointment, in the event of a disagreement between the parties, of the chairpersons of arbitration boards by the Minister of Labour from a list of retired judges, the Committee takes note of the decision pronounced by an Ontario court of first instance which, having been called upon to conduct a judicial review, concluded that the Minister had not exceeded his powers and that it was not the court's role to criticize ministerial policy. However, the Committee wishes to stress that the Government should ensure that the person thus appointed should not only be strictly impartial but should also appear to be so if the confidence of both sides is to be gained and maintained (see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 549), this being all the more important in the public sector where the Government is itself one of the parties.

The Committee's recommendations

1. 118. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) In the light of the work conducted by the committee for the reform of public agencies set up by the Government and noting that the Government wished, in the first quarter of 1999, to adopt a new policy regarding the appointment of members of public agencies, including the Ontario Labour Relations Board (OLRB), the Committee requests the Government to keep it informed of the possible adoption of that policy and, where appropriate, of its content. In the event of that policy not yet having been implemented, the Committee requests the Government to keep it informed of the measures it intends to take in this regard.
   • (b) The Committee stresses that the chairpersons of arbitration boards appointed by the Minister of Labour in the event of a disagreement between the parties, should not only be strictly impartial, but should also appear to be so if the confidence of both sides is to be gained and maintained.