Canada: Bill 36: Labour Relations Implications Of Devolution Of The Ontario Health Care System

On November 24, 2005, the Ontario government introduced Bill 36: The Local Health System Integration Act, 2005 ("Bill 36"). If passed, Bill 36 will purportedly shift much of the management, co-ordination and funding of local health care services providers (including hospitals, community care access centres, long-term care facilities, community support service organizations, mental or community health centres and similar organizations) from the Ministry of Health and Long-Term Care ("MOHLTC") to community-based, local health integration networks ("LHINs"). The Minister of Health and Long-Term Care, George Smitherman, called the legislation a positive step forward in building a health care system that is more accountable and equitable, where health care decisions respecting services which are delivered locally are made locally. Accordingly, the purpose of the proposed Act is stated as follows:

...to provide for an integrated health system to improve the health of Ontarians through better access to health services, co-ordinated health care and effective and efficient management of the health system at the local level by local health integration networks.

(For a fuller description of LHIN governance and the role of LHINs in health system, funding and restructuring, see BLG’s Health Law Bulletin of December 16, 2005). To achieve its purposes, Bill 36 resurrects the Public Sector Labour Relations Transition Act, 1997 to deal with labour relations issues resulting from certain integration decisions within the health services sector. This bulletin focuses on the labour relations implications of Bill 36.

Background

In June 2005, the Ontario government announced its plan to transform Ontario’s health care system and began the process of creating the 14 not-for-profit corporations that will act as the first LHINs under Bill 36. The 14 corporations each represent a distinct geographic area in the province.

Bill 36 is the next phase in the government’s plan. Bill 36 received first reading on November 24, 2005. Second reading of the Bill was debated on November 29, December 5, December 6 and December 7, 2005. On the latter date, Bill 36 was referred to the Standing Committee on Social Policy. Committee hearings are scheduled for January 30 and 31, February 1 and 2, 2006 in four locations: Toronto, London, Ottawa and Thunder Bay. If passed, the Bill will come into force on the day it receives Royal Assent.

Bill 36 continues the 14 corporations created in June, 2005 as crown agencies and provides for their powers, purposes and role in funding and integrating the health care system.

The objectives of a LHIN include the right to plan, fund and integrate the local health system within the geographic boundaries of the LHIN. The word "integrate" is broadly defined to permit the coordination, transfer, merger, amalgamation wind-up, start-up or cessation of operations, entities or health services.

Health System Integration

Part III of Bill 36 provides that, in accordance with a provincial strategic plan, LHINs will, first and foremost, create an integrated health service plan for the local health system within their geographic area and will make that plan available to the public. The plan will include a vision, priorities and strategic directions for the local health system and will set out strategies to integrate and coordinate the system. In creating the plan, LHINs will be required to seek the participation of persons or entities involved with the local health system in which the LHIN operates; and, for this purpose, the LHIN must create a health professionals advisory committee consisting of regulated health professionals as well as those that are prescribed by regulation.

Part V of Bill 36 provides more detail about how a LHIN, the Minister or the Lieutenant-Governor in Council ("LGIC") may require integration.

Specifically, a LHIN may integrate the local health system by:

  • providing or changing funding to a local health service provider;
  • facilitating and negotiating the voluntary integration of persons or entities or the voluntary integration of services between health service providers or between a health service provider and an entity or person that is not a health service provider; or
  • issuing an integration decision that requires a health service provider to proceed with or to cease certain integration activities.

In fact, under Bill 36, a LHIN is required to issue an integration decision any time it integrates the local health system in these ways. Further, in coordinating health services in its geographic area, a LHIN may issue an integration decision requiring a specific health service provider to:

  • provide all or a part of a service or to cease providing a particular service;
  • to provide a service to a certain level, quality or extent;
  • to transfer all or part of a service to one location or another;
  • to transfer all or a part of a service, or to receive all or a part of a service from another person or entity;
  • to carry out another type of integration of services that is prescribed; and/or
  • to anything or refrain from doing anything necessary to achieve the integration required under the above paragraphs.

However, Bill 36 restricts a LHIN from a number of significant integration activities, including:

  • acquiring, disposing of, leasing, mortgaging, charging, transferring or otherwise encumbering any interest in real property or any personal property;
  • borrowing, lending or investing money;
  • creating a subsidiary;
  • directly providing health care services without the consent of the LGIC;
  • requiring a health care service provider to cease operating, or to dissolve/wind-up or amalgamate its operations or business, including by way of altering or changing the composition or structure of its membership or board of directors;
  • ordering any persons or entities that operate a public hospital, including, specifically the University of Ottawa Heart institute, to cease performing any non-clinical service and to integrate the service by transferring it to a prescribed person or entity; or
  • doing anything contrary to the LHINs integrated health services plan.

Rather, under Part V of the Bill, such powers are left to the MOHLTC and/or to the LGIC.

The legislation also specifically provides that the Minister can devolve to a LHIN any powers, duties or functions of the Minister under any Act for whose administration the Minister is responsible.

The Labour Relations Implications of Bill 36

Part VII of Bill 36 contains complementary amendments to the Public Sector Labour Relations Transition Act, 1997 ("PSLRTA"), extending its applicability to health services integrations which will be defined as follows:

"health services integration" means an integration that affects the structure or existence of one or more employers or that affects the provision of programs, services or functions by the employers, including but not limited to an integration that involves a dissolution, amalgamation, division, rationalization, consolidation, transfer, merger, commencement or discontinuance, where every employer subject to the integration is either:

  1. a health service provider within the meaning of the Local Health System Integration Act, 2005 or
  2. an employer whose primary function is or, immediately following the integration, will be the provision of services within or to the health services sector.

More importantly, while much of the PSLRTA was only applicable for a transitional period, the PSLRTA will now be applicable to health services integrations for an indefinite period. Bill 36 removes from the PSLRTA, all reference to the transitional period.

Accordingly, under a re-drafted section 9 of the PSLRTA, the PSLRTA will be applicable to an employer that is or will be subject to a health services integration decision and a union that represents the employees to such an employer will be able to request an order from the Ontario Labour Relations Board ("OLRB") providing that the PSLRTA will apply to a particular integration decision. As well, the PSLRTA will apply (with some necessary modifications) to certain partial integrations. Partial integrations are defined as follows:

"partial integration" means an event to which this Act applies where,

  1. some or all of the programs, services, or functions performed by employees in a particular bargaining unit at a predecessor employer are transferred to or otherwise integrated with a successor employer, and
  2. on and after the changeover date, the predecessor employer continues to operate.

So, for example, in the event of a partial integration, as provided in section 14 of the PSLRTA, each bargaining agent that has bargaining unit rights in respect of a predecessor bargaining unit before the changeover date has bargaining rights in respect of a like unit at the successor employer, but the description of the bargaining unit shall be such as to include only:

  1. employees who, immediately before the changeover date,
  2. (i) were employees of the predecessor employer in the bargaining unit for which the bargaining agent has bargaining rights, and

    (ii) were employed in the delivery of programs, services or functions that are being transferred to or otherwise integrated with the successor employer; and

  3. employees who are hired to replace employees described in clause (a).

For greater clarity, Bill 36 goes on to provide that a bargaining agent that has bargaining rights in respect of a non-affected bargaining unit (i.e. one that is not being integrated with another) does not have bargaining rights in respect of a like bargaining unit at the successor employer on the changeover date.

Of course, in the case of full integrations, section 14 of the PSLRTA will apply without modification. A bargaining agent that has bargaining rights in respect of a bargaining unit of a predecessor employer immediately before the changeover date will have bargaining rights in respect of a like bargaining unit of the successor employer, which includes:

  1. employees who immediately before the changeover date were employees of the predecessor employer in the bargaining unit for which the bargaining agent has bargaining rights; and
  2. employees who are hired to replace employees described in clause (a).

Section 22 and 23 of the PSLRTA provide that a successor employer or any bargaining agent that has bargaining rights over a bargaining unit of the successor employer may apply to the OLRB after the changeover date to determine the number and description of bargaining units that are appropriate for the successor employer’s operations, and which bargaining agents, if any, represent the employees in each bargaining unit. In making this determination, the OLRB may order representation votes among the employees in any affected bargaining unit. For bargaining units where 40% or more of the employees were not represented by a bargaining agent immediately before the changeover date, the ballot for the vote must include the option of having no bargaining agent. No representation vote is necessary if the OLRB determines that no change to the number or description of the bargaining units is necessary or if the bargaining agents which represent the employees in the successor bargaining unit all agree upon the bargaining agent that represents the employees in the unit and 40% or more of those were not represented by a bargaining agent before the changeover date. Bill 36 does not make any changes to these provisions either for full or partial integrations.

Similar amendments are made to sections 15 (re: collective agreements); 16 (re: hiring of employees of a successor employer); 17 (re: bargaining rights under other Acts) and 18 (the appointment of conciliation officers) of the PSLRTA in respect of partial integrations.

With respect to collective agreements, Bill 36 simply says that section 15 of the PSLRTA will apply, with necessary modifications, to any partial integration. The "necessary modifications" are not specifically laid out. Accordingly, the collective agreement, if any, that applies with respect to employees of a predecessor employer affected by an integration decision (or a partial decision) immediately before the changeover date will continue to apply with respect to employees who are employed by the successor employer after the changeover date and with respect to employees hired by the successor employer to replace such employees; and, the successor employer will be bound by the collective agreement as if he or she or it had been a party to the agreement. However, in the case of a partial decision, it is likely that the collective agreement will only apply with respect to the employees listed, above, under the revised section 14 of the PSLRTA.

In the event that the application of these provisions results in more than one collective agreement being applicable to a particular bargaining unit, section 24 of PSLRTA provides that the provisions of each collective agreement will merge and form one part of a single collective agreement (a "composite" agreement). Only the successor employer and the bargaining agent representing the employees in the bargaining unit are parties to such an agreement. The composite agreement lasts for one year unless the parties agree, in writing, to an alternate term.

Further, in the event that two or more collective agreements with seniority provisions apply to or will be merged for a particular bargaining unit, the parties can either agree on which seniority provisions will apply or can apply to the OLRB to determine the matter. Ultimately, whichever agreement’s seniority provisions are deemed to apply will also affect which grievance provisions apply to the bargaining unit.

At any time, a party to a composite agreement can give notice of its desire to bargain for a new collective agreement and the composite agreement will cease to apply 90 days following the date on which the notice to bargain was delivered. In the event, that the parties are unable to agree on a collective agreement, section 43 if the Labour Relations Act may apply to allow one or both of the parties to seek an order from the OLRB to direct a settlement of a new collective agreement by arbitration. A board of arbitration with that task is required to consider the following criteria:

  1. The employer’s ability to pay in light of its fiscal situation;
  2. The extent to which services may have to be reduced in light of the board’s decision if current funding and taxation levels are not increased;
  3. The economic situation in Ontario and in the part of Ontario where the employer is located;
  4. A comparison, as between the employees and other comparable employees in the public and private sectors, of the terms and conditions of employment and the nature of the work to be performed; and
  5. The employer’s ability to attract and retain qualified employees.

The provisions apply only to parties whose labour relations are governed by the Labour Relations Act 1995 and to whom the Hospital Labour Disputes Arbitration Act does not apply. Bill 36 does not appear to alter or modify any of these provisions.

With respect to sections 16 and 17 of the PSLRTA, Bill 36 simply says that it applies with necessary modifications to partial integrations. As above, however, the "necessary modifications" are not specifically listed.

With respect to the duty to bargain, Bill 36 provides that sections 18(3) and 18(4) of the PSLRTA apply to partial integrations as follows:

  1. a notice to bargain given by a predecessor employer or the bargaining agent of that employer in respect of a non-affected bargaining unit continues to be valid between those parties;
  2. however, a notice to bargain between the same parties does not apply to a successor employer or the bargaining agent that has bargaining rights in respect of a successor bargaining unit and neither party is under an obligation to bargain as a result of the notice; and
  3. a predecessor employer and a bargaining agent that has bargaining rights in respect of non-affected bargaining unit of a predecessor bargaining unit or a non-affected bargaining unit and either of those parties may give notice to bargain on or after the changeover date if entitled to do so under the Labour Relations Act.

Further, under section 18(5) of the PSLRTA, interest arbitrations in which a final decision has not been issued on the changeover date are deemed terminated as between predecessor and successor employers. The same provision applies under Bill 36, but with respect to partial integrations, interest arbitrations involving predecessor or non-affected bargaining units, and bargaining agents, remain active subject to the condition that the parties may be given additional opportunities to make submissions with respect to the affect of the partial integration.

As such, it appears that the OLRB will have broad powers under Bill 36 and the PSLRTA to combine bargaining units, and to make such other orders as it deems necessary in order to facilitate health services integration decisions made by the LGIC or by the LHINs.

Implications for CCACs

Bill 36 also makes a number of key amendments and additions to the Community Care Access Corporations Act, 2001. First, Bill 36 confirms that each corporation designated as a CCAC before Bill 36 becomes law will be continued and will be considered a health service provider under the legislation. However, the letters patent issued to the CCACs will be extinguished and the LGIC will have the power, by regulation, to incorporate other CCACs as corporations without share capital.

Second, Bill 36 removes the right of the LGIC to appoint members of the board of directors and the executive director of a CCAC. Instead, members will be determined by by-law of the corporation and the Board of Directors will appoint the executive director. Accordingly, Bill 36 returns the corporate governance and structure of the CCACs to their pre-2001 state.

More importantly however, under Bill 36, the LGIC is given the power, by regulation, to (i) amalgamate or dissolve one or more CCAC (and to deal with its assets, real and personal property, employees, rights, liabilities and obligations); (ii) divide a CCAC in to two or more CCACs; and (iii) change the name of a CCAC. With respect to the movement of employees, the Minister is specifically given the power to order the transfer of some or all of the employees of a CCAC to one or more other CCACs in the event of an amalgamation, dissolution or division of a CCAC; and, such orders of the Minister are not considered to be Regulations under the Act, so, it is likely that the Minister and/or the LGIC could make such orders, without first having to resort to public consultations.

That said, CCACs must be given notice from the Minister and/or LGIC before any orders or regulations as described above are finalized. Upon such notice, CCACs will be given the opportunity to submit a report that contains proposals for the reorganization of the CCAC, the transfer of assets and liabilities and/or the transfer of employees. Further, Bill 36 reiterates that if a regulation of the LGIC or order of the Minister results in the amalgamation of two or more CCACs the PSLRTA will apply. In such circumstances, the amalgamating corporations will be deemed to be the predecessor employers and the amalgamated corporation will be deemed to be the successor employer. A similar structure applies to employees transferred between CCACs. (i.e. the CCAC from which the employees are transferred is the predecessor employer and the CCAC to which the employees are transferred is considered the successor employer.)

www.blgcanada.com In the event that a regulation of the LGIC or an order of the Minister dissolves a CCAC, the Minister is required, after the payment of all debts and liabilities of the corporation, to transfer the remaining property of the dissolved entity to either (i) another CCAC operating in the same area; (ii) another body or entity prescribed by the Minister; or (iii) the Crown. However, an affected CCAC is not entitled to any compensation for any loss or damages arising from the transfer of such property except with respect to losses that relate to the value of property that was not acquired with money received from the government.

The Prognosis:

While many hospital administrators and executive directors of other health care organizations appear to be in favour of the changes proposed in Bill 36, at present, the proposed legislation appears to raise more questions than it answers. In particular there has been some early criticism of the Bill on the basis that while it sets out the objective of achieving devolution of the health care system from the MOHLTC to community-based LHINs, the powers of a LHIN to achieve coordination and integration of health services are limited. Instead, in many respects the MOHLTC and the LGIC have kept for themselves, the substantive powers and responsibilities needed by the LHINs to truly achieve a transformation of the provincial health care system.

Accordingly, only time will tell whether the government’s plan under Bill 36 will result in the benefits, efficiencies and equities promised by the Ministry in adopting the legislation.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions