Monday, September 20, 2010

Ontario arbitrator rejects wage freeze

For those of us entering bargaining in the midst of a so-called "wage freeze", a welcome decision arrived this week from an Ontario arbitrator who considered the legality and the reasonableness of government mandated wage freezes. In addition, arbitrated contracts even during the 2008 recession have included wage increases commensurate with inflation.

Thousands and thousands of public sector workers in Canada will be negotiating with governments that have "mandated" wage freezes, including Ontario and also British Columbia. While governments attempt to portray this as a necessary feature of the bargaining climate, in fact it is an unreasonable and unfair labour practice. No party to a collective agreement should be able to predetermine the outcome of any item of bargaining. That in itself means the bargaining process is limited, rather than open and fair to both parties. When governments impose a "wage freeze" this is just what they are doing.

The Globe & Mail reported: "In his ruling, the arbitrator says labour leaders and employers must respond to economic conditions, not a government’s fiscal policies, in setting wages."

So does this mean the recession of 2008 justifies zero wage increases based on "economic conditions"? Another recent arbitration ruling says no. In this arbitrated wage settlement, CN rail workers were seeking 3 - 4 percent wage increases to begin in 2009 - immediately following the recessionary period. While the arbitrator did not uphold these amounts, he did award increases of 1.8, 2.4 and 2.6 %. Included in his rationale were the predictions of cost of living increases in the period 2009 - 2012.

Clearly, when the "just and reasonable" tests are used, a wage freeze is not in order.

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