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Public Sector Transition Stability Act, 1997

  • Content last reviewed: October 2009

You should understand that this pamphlet is for your convenience and information only. It is not a legal document. For official information, please refer to the statute and the appropriate regulations.

The Public Sector Transition Stability Act, 1997

The Public Sector Transition Stability Act, 1997, or Bill 136, came into force on October 29, 1997. The statute consists of two new Acts:

  1. The Public Sector Labour Relations Transition Act, 1997 (PSLRTA), which establishes a framework for resolving labour relations issues resulting from restructuring of municipalities, district school boards, hospitals, and other broader public sector employers.
  2. The Public Sector Dispute Resolution Act, 1997 (PSDRA), which reforms the interest arbitration processes which apply to police, firefighters and hospital employees.

This pamphlet provides an overview of these two new Acts.

The statute also makes related amendments to the Employment Standards Act, 2000 and the Pay Equity Act.

The Public Sector Labour Relations Transition Act, 1997

PSLRTA deals specifically with the labour relations issues arising from certain kinds of restructuring in the municipal, education, and hospital sectors. It provides a framework for establishing bargaining units, bargaining agents and collective agreements for the new employer where the employees of one or more of the former employers were unionized. PSLRTA also sets out mandatory rules governing the determination of seniority during the restructuring process. This pamphlet summarizes the major provisions of PSLRTA.

Who Does PSLRTA Apply To?

PSLRTA applies to municipalities, hospitals and district school boards, upon the happening of specified restructuring events.

How Is PSLRTA Triggered?

The provisions of PSLRTA are triggered by restructuring events specified in the legislation. These events include:

  • amalgamation or other specified types of restructuring of municipalities and/or local boards;
  • the restructuring of the City of Toronto and the Toronto Hydro-Electric Commission pursuant to the City of Toronto Act, 1997;
  • the assumption by a district school board of the jurisdiction of two or more school boards or their minority language sections;
  • the amalgamation of two or more hospital corporations, and, if ordered by the Ontario Labour Relations Board, certain other specified types of hospital restructuring.

The date upon which the restructuring event takes place is known as the "changeover date".

What Is The Impact On The Existing Workforce At The Changeover Date?

Immediately following the changeover date, employees who were represented by a union continue to be represented by the same union and covered by the same collective agreement. Where no collective agreement is in effect at the time of the changeover, the most recently expired agreement is revived. If a union had bargaining rights for a group of employees before the changeover, but the parties had not yet reached a first collective agreement, the terms and conditions of employment are frozen until a new collective agreement is reached.

Non-union employees continue to be unrepresented following the changeover. They may or may not ultimately be included in a new bargaining unit once the new units are determined. The terms and conditions of employment for non-unionized employees are not affected by the changeover.

How Are Bargaining Units Selected After Changeover?

In those workplaces where some or all of the workforce is unionized, bargaining units for the new employer may be defined by agreement between the new employer and all or a subset of the affected unions, or by order of the Ontario Labour Relations Board. If an application is made to the Board, the Board must determine what bargaining units are appropriate for the new employer's operation. Special rules apply to the determination of bargaining units for professional employees and construction employees.

How Are Bargaining Agents Selected?

Once the bargaining units have been determined, there are two ways to choose the bargaining agent(s) which will represent employees in those units. If the parties have agreed on the bargaining unit, and less than 40% of employees in that unit are non-union, the affected unions may agree on which of them will represent the unit. Where no agreement can be reached or 40% or more of the employees are non-union, the Ontario Labour Relations Board must order a vote to select a bargaining agent. Where 40% or more of the employees are non-union, the ballot must include a "no union" option. The voting must be conducted so as to ensure that one of the choices on the ballot ultimately receives more than 50% of the votes cast.

What Collective Agreements Apply?

During the selection of new bargaining units and bargaining agents and for a period of time thereafter, the old collective agreements continue to apply. If employees in a new bargaining unit were covered by more than one collective agreement at the time of the changeover, the agreements are effectively "stapled together" to create a "composite" agreement. The composite agreement can remain in place for up to one year from the date the bargaining unit was determined. During this period, the employer and the union can replace the composite agreement through one of the methods discussed herein.

As an interim measure, PSLRTA provides that the seniority and grievance provisions of one of the collective agreements to which the new bargaining agent was a party before the changeover will apply to the entire new unit. The seniority of formerly non-union employees must be recognized on the same basis as unionized employees. These provisions will apply until a new collective agreement has been reached.

How Do The Parties Reach A New Collective Agreement?

Composite agreements are only intended to remain in effect until the parties have entered into a new collective agreement. A new agreement may be reached in one of the following ways:

  • The parties may select one of the collective agreements making up the composite agreement. This agreement may be amended by the parties.
  • The parties may mutually request that the Ontario Labour Relations Board select one of the existing collective agreements making up the composite agreement.
  • Either party may give notice to bargain, thereby triggering an obligation to negotiate a new collective agreement. If collective bargaining breaks down, either party may apply to the Ontario Labour Relations Board for first contract arbitration. The Board will order binding arbitration for the new agreement if it finds that bargaining has broken down as a result of certain criteria enumerated in section 43(2) of the Labour Relations Act.

How Are Service And Seniority Treated?

PSLRTA ensures that employees' past service or seniority is protected following the changeover. Where non-union employees are included in a bargaining unit after the changeover, their past service must be recognized in determining their position on the seniority list. Similarly, where two or more bargaining units are merged following the changeover, PSLRTA generally requires calculation of seniority for all members of the bargaining unit in accordance with a common measure and on a bargaining unit-wide basis.

The Public Sector Dispute Resolution Act, 1997

PSDRA reforms the interest arbitration processes applicable to police, firefighters and hospital employees.

PSDRA provides for expedited time lines for interest arbitration, and expands the choice of dispute resolution mechanisms to include mediation-arbitration and, in some cases, final offer selection. A combination of mediation and arbitration will be generally be the preferred method of dispute resolution. The amendments also specify that interest arbitrators must consider the employer's ability to pay and other related criteria in reaching their decision.