Canada: Putting Students First Act - September, 2012

On September 11, 2012, the Putting Students First Act, 2012, (the "PSFA" or the "Act") came in to force. The PSFA imposes a broad compensation freeze on all employees and imposes the July 5, 2012 memorandum of understanding negotiated between the Ministry of Education and the Ontario English Catholic Teachers' Association (the "OECTA MOU"), or similar memoranda of understanding, on all unionized employees.

RESTRAINT PERIOD

The PSFA establishes a two-year restraint period, which starts on September 1, 2012. During the restraint period, the Act set out requirements and processes which apply to school boards, employees of boards, employee bargaining agents and collective agreements in the education sector. The length of the restraint period can be extended by regulation in certain circumstances.

The PSFA sets out requirements for terms that must be included in employment contracts and collective agreements that apply during the restraint period. In particular, the PSFA requires school boards and bargaining agents to include terms and conditions in their collective agreements that are consistent with the OECTA MOU. Among other things, the OECTA MOU provides:

• No salary increase at the top of the teacher's wage grid for two school years;
• All teachers will move through the salary grid in accordance with their individual experience and qualifications within the collective agreement on the 97th school day each year;
• All teachers will take a 1.5% pay cut in the form of three unpaid professional development days in the second year;
• No further accumulation of sick days for the purpose of the current retirement gratuity for payment of unused sick days after August 31, 2012;
• A restructured short-term sick leave plan that will include up to 10 sick days at full pay; thereafter 120 days of sick leave at a rate of pay of 66.67% or 90%, if the entitlement has been determined through an adjudicative process. The decisions of the third party adjudicator will be subject only to the appeal process and not the grievance process;
• Any leave provision under the local 2008–2012 collective agreement that utilizes deduction from sick leave, for reasons other than illness, shall be granted without loss of salary or deduction from sick leave to a maximum of five days per school year. Local collective agreements that currently have less than five days shall remain at that number. Local collective agreements that have more than five days shall be limited to five days; and
• A teacher shall receive 100% of salary for not less than a six week period following the birth of her child, subject to provisions in the 2008–12 local collective agreement but without deduction from sick leave.

Collective agreements must include terms that reflect either the OECTA MOU or the another memorandum of understanding, if any, entered into by the employee bargaining agent prior to August 31, 2012. For example, on July 30, 2012, the Ministry of Education also entered into a Memorandum of Understanding with the Association of Professional Student Services Personnel. Furthermore, on August 7, 2012, the Ministry entered into a Memorandum of Understanding with L'Association des enseignantes et des enseignants franco-ontariens.

EMPLOYEES WHO DO NOT BARGAIN COLLECTIVELY

For non-unionized employees, the PSFA freezes their compensation or rate of pay as of September 1, 2012 for a period of two years, although that period may be further extended by regulation. Compensation is broadly defined and includes "anything paid or provided, directly or indirectly, to or for the benefit of a person who performs duties and functions that entitle him or her to be paid and includes salary, benefits, perquisites and all forms of non-discretionary and discretionary payments." In light of this broad definition, it is apparent that additional vacation or any other benefit or perquisite can not be provided to an employee during the restraint period.

The compensation freeze does not apply to directors and superintendents earning more than $100,000, whose compensation has already been frozen pursuant to the terms of the Broader Public Sector Accountability Act, 2010.

All sick days accumulated by non-unionized employees as of August 31, 2012 will stand to the employee's credit but no sick leave days will accumulate after that day. Upon the retirement of the employee, sick leave credits that accumulate until August 31, 2012 shall be paid out to the employee at the employee's rate of pay as of August 31, 2012. Going forward, non-unionized employees are eligible for 10 days of sick leave at 100% of their salary and thereafter 120 days of sick leave at a rate of pay of 66.67% or 90%, if the entitlement to 90% has been determined through an adjudicative process agreed to by the employee and the board. Any service credits also will not accumulate after August 31, 2012.

The PSFA provides that if an employment contract that applies during the restraint period is inconsistent with the terms set out in the Act, the contract is inoperative to the extent of the inconsistency.

The PSFA also provides that a school board will not provide compensation to an employee, before, during or after the restraint period, for compensation that he or she will not, does not, or did not receive as a result of the Act.

With respect to principals and vice-principals, the Ministry of Education has stated that locally negotiated terms and conditions for principals and vice-principals must conform to the parameters set out in the PSFA. In particular, principals and vice-principals will be eligible for grid movement on the 97th day of each school year during the term of the agreement. In this regard, they are eligible to move on their local salary grids. Principals and viceprincipals will be required to take unpaid days in 2013-14. They are not expected to work on three unpaid days that are scheduled on professional activity days.

EMPLOYEES WHO BARGAIN COLLECTIVELY

With respect to employees who bargain collectively, the RSFA preserves only the façade of collective bargaining. All boards have a "mandate to negotiate for collective agreements". However, that mandate, and indeed bargaining itself, is greatly circumscribed by the PSFA. The mandate given to school boards is to negotiate the terms of the OECTA MOU. For teachers, school boards must bargain for a collective agreement that includes and is not inconsistent with the terms of the OECTA MOU. For non-teacher bargaining units, school boards must bargain terms and conditions that are substantially similar to the OECTA MOU or to a memorandum of understanding entered between the bargaining agent and the Ministry prior to August 31, 2012, provided that memorandum of understanding is substantially similar to the OECTA MOU.

The PSFA sets out restrictions when no collective agreement is in operation. Subsection 5(1) provides:

During the period of time when no collective agreement is in force after September 1, 2012 (i.e. when the parties are engaged in bargaining) no school board may apply, agree to or implement any terms or conditions of employment that are inconsistent with the terms of the OECTA MOU. The OECTA MOU, at least as far as the PSFA is concerned, is the governing agreement in public education.

With respect to non-teaching staff, the Ministry has indicated that they will be eligible for grid movement on the 97th day of each school year during the term of the agreement. The Ministry has indicated that for nonteaching support staff , agreements should be substantially identical to the agreement reached on August 31, 2012 with educational assistants.

For support staff in job classifications such as custodians, school office, educational assistants and early childhood educators, one unpaid day will be required to offset movement through the grid. It is the Ministry's view that as these staff are lower paid, fewer days are required to find adequate savings. Collective agreements of members of the Association of Professional Student Services Personnel are required to reflect the MOU signed with that group.

COMING INTO OPERATION OF A COLLECTIVE AGREEMENT

Under the terms of the PSFA, once the parties believe that they have concluded a collective agreement, before it becomes operational, it must be submitted to the Minister. If the Minister is satisfied that it has adopted all of the terms set out in the OECTA MOU, she will declare the collective agreement in force. If she concludes that the collective agreement does not contain the terms in the OECTA MOU, she will not declare the collective agreement in force and the Lieutenant Governor in Council then has a number of powers. The Lieutenant Governor in Council is given powers under the Act to make orders respecting various matters. Among the orders that may be made are orders requiring terms and conditions to be included in a collective agreement, imposing a new collective agreement, requiring the parties to negotiate a new collective agreement, prohibiting strikes and lock-outs, and requiring the reimbursement by employees of payments that were made contrary to the Act.

The Minister is permitted to complain to the Ontario Labour Relations Board alleging contraventions of the PSFA, and is given the right to participate in any proceeding relating to the implementation or interpretation of the Act. The jurisdiction of the Ontario Labour Relations Board, arbitrators, arbitration boards and courts is limited under the Act in the specified circumstances.

Under section 19 of the PSFA, the Lieutenant Governor in Council has the power to pass regulations prescribing terms and conditions that may be imposed in an employment contract or collective agreement, including terms and conditions respecting:

• criteria and processes to be used in the hiring of teachers by boards; and
• the use of diagnostic assessments of students.

On September 13, 2012, the Ministry released Regulation 274 with respect to hiring practices. This Regulation only applies to boards whose employee bargaining agent has on or before August 31, 2012 entered into the OECTA MOU or a similar MOU. Under the new Regulation, boards will decide who is on their occasional teacher roster. They are required to create a long term occasional ("LTO") teacher list of teachers drawn from the LTO roster. The board will take into account the collective agreement rights of supernumerary and/or redundant teachers. In the event that the position remains open, the board must post the position and interview the five most senior LTO applicants who meet the requirements of the position. The requirements include the following:

• having completed a minimum of one LTO assignment of at least four months duration;
• not having received an unsatisfactory evaluation; and
• having the qualifications for the position.

If the position is still not filled, then suitable candidates from the occasional teachers' roster are interviewed. Under the new Regulation, unsuccessful interviewees may request a feedback interview and boards are required to provide such feedback to assist with professional growth of the candidates.

The government was unable to pass the PSFA prior to the start of the school year. Thus, the legislated wage freeze for all teachers and other unionized employees was not in effect on September 1, 2012. Consequently, for all those school boards that had not signed off on the OECTA MOU, wage increases took effect (or should have taken effect) at the beginning of the school year for all employees not yet at the top of the grid. The PSFA deals with that issue by requiring a school board to nullify or limit the relevant wage increase to ensure it complies with the provisions of the Act. Many school boards were left scrambling in the week leading up to September 1 to decide whether to freeze payroll or let payroll roll over as the minority government attempted to strike a deal to pass the PSFA prior to the start of the school year. Since under the OECTA MOU those teachers are not permitted to move up the salary grid until the 97th school day in each school year and since the PSFA expressly provides that terms and conditions that are inconsistent with the OECTA MOU are inoperative, school boards will have to determine what to do with the funds provided to any employee who received a pay increase after September 1, 2012.

LOCAL BARGAINING

What is next for school boards is that they now must sit down to bargain collective agreements. With teachers, school boards must bargain for a collective agreement that includes and is not inconsistent with the terms of the OECTA MOU. With non-teacher bargaining units, school boards must bargain terms and conditions that are substantially similar to the OECTA MOU. Presumably, some school boards and bargaining agent may have the will to negotiate local issues and what is left to bargain will vary. Others may simply live with the terms set out in OECTA MOU and leave any local issues for two years time – when the restraint period under the PSFA is set to expire.

Parties have until December 31, 2012 to conclude collective agreements and to submit them for approval to the Ministry of Education. Local bargaining cannot amend sections of the collective agreement amended by the OECTA MOU. All provisions of the collective agreement that are not amended by the OECTA MOU or by the local bargaining process will remain status quo.

Outside of local bargaining, what comes next will shortly become clear. OSSTF and ETFO, joined by other parties, will likely launch a constitutional challenge to the PSFA on the grounds that it violates the freedom of association protections under the Canadian Charter of Rights and Freedoms.

In the meantime, the passing of the PSFA brings some clarity, at least temporarily, to the education landscape. The PSFA prohibits strikes and lock outs for the next two years. Subject to any "days of action" or similar protests, all schools will be open and operational for the next two years. All monetary issues that would often prove tricky at the bargaining table have been resolved and only local issues may be bargained.

In the past six months, the government has been forced to show its hand. Once content to simply set the monetary parameters for the parties to bargain and act as a facilitator at the provincial discussion table, it is now clear that the government is, for all intents and purposes, a party at the bargaining table. By negotiating a deal directly with OECTA and then imposing that deal on school boards, this government has dropped all pretence that it is an objective third party. This is not a criticism of the government so much as it is a description of the reality of bargaining in the education sector. Perhaps now the government will also move to drop the pretence of local bargaining of monetary issues and legislate a true province-wide structure for collective bargaining in the education sector.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.