Bill 5 2013

An Act to freeze compensation for two years in the public sector

Preamble

Since 2003, the rate of annual spending in the Province of Ontario has increased well in excess of the rate of inflation and population growth, leading to alarmingly high annual deficits and accumulated debt. Without urgent action to put the Province on a sustainable path, by the fiscal year 2017-2018 the annual deficit is projected to grow to a staggering $30.2 billion and accumulated debt to $411.4 billion.

The interest alone on that debt will assume an even greater share of the Province's program spending, which should be focused on core services like health care, education, infrastructure and justice, not paying interest on debt. In order for Ontario to compete internationally and attract investment, it is imperative that the Government get its spending under control, balance the budget and pay down its mounting debt.

It is equally imperative that the Government lead by example. Since 2010, the present Government has consulted fully with its employees and bargaining agents representing those employees and solicited their suggestions for achieving ways to reduce the annual deficit and accumulated debt. The Province's fiscal plans, as laid out in its budgets and other documents, have repeatedly and publicly made clear the necessity of reining in the costs of human resource compensation in the public sector. Those costs account for more than half of all program spending.

To date, according to Ministry of Labour figures, the Province has been unable to achieve a zero increase in the costs of human resource compensation in the public sector. For example, the Government introduced Bill 115 on August 27, 2012 to impose a two-year wage freeze on boards, employees of boards and employee bargaining agents in the education sector, starting, for most employees, on September 1, 2012. However, Bill 92 (Comprehensive Public Sector Compensation Freeze Act, 2012) died on the Order Paper when the Assembly was prorogued on October 15, 2012. As a result, on its current path, the Province is unlikely to achieve the structural change in spending that is necessary to balance the budget by the fiscal year 2017-2018.

To that end and to better reflect the current ability of the private sector economy to pay, the Government must impose a comprehensive freeze of at least two years on all salaries and compensation paid to employees in the public sector.

Therefore, Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Definitions

   1.  In this Act,

"compensation" means all forms of payment, benefits and perquisites paid or provided, directly or indirectly, to or for the benefit of a person who performs duties and functions that entitle the person to be paid, and includes discretionary payments; ("rémunération")

"compensation plan" means the provisions, however established, for the determination and administration of a person's compensation; ("régime de rémunération")

"employee", "employer" and "public sector" have the same meaning as in subsection 2 (1) of the Public Sector Salary Disclosure Act, 1996; ("employé", "employeur", "secteur public")

"pay range" means a range of rates of pay; ("échelle salariale")

"rate of pay" means the rate of remuneration or, where no such rate exists, any fixed or ascertainable amount of remuneration. ("taux de salaire")

Compliance with this Act

   2.  Every employer shall comply with this Act with respect to the employer's employees.

Pay freeze

   3.  (1)  The rate of pay for an employee employed in a position in the public sector shall not be increased before the second anniversary of the day this Act receives Royal Assent, except as permitted by subsection (3).

Pay range

   (2)  The maximum amount within a pay range, if any, for an employee employed in a position in the public sector and any steps within the pay range shall not be increased before the second anniversary of the day this Act receives Royal Assent.

Increase in minimum wage

   (3)  If the rate of pay for an employee employed in a position in the public sector falls below the minimum wage established under Part IX of the Employment Standards Act, 2000, the rate of pay may be increased to match the minimum wage.

Benefits freeze

   4.  (1)  A benefit, perquisite or payment provided to an employee employed in a position in the public sector under a compensation plan as it existed on the day this Act receives Royal Assent shall not be increased before the second anniversary of that day.

Same, other benefits

   (2)  Despite subsection (1), no benefit, perquisite or payment shall be provided to an employee employed in a position in the public sector in recognition of any of the following matters relating to the employee, even if the benefit, perquisite or payment is authorized under the compensation plan as it existed on the day this Act receives Royal Assent:

    1.  Length of time in employment.

    2.  An assessment of performance.

    3.  Successful completion of a program or course of professional or technical education.

No new or additional benefits

   (3)  No new or additional benefits, perquisites or payments, as compared to those authorized under a compensation plan as it existed on the day this Act receives Royal Assent, shall be provided to an employee employed in a position in the public sector under the compensation plan before the second anniversary of the day this Act receives Royal Assent.

Overpayment of compensation

   5.  Compensation paid to an employee in the public sector in contravention of section 3 or 4 is a debt due to the employer and the employer may recover it by any remedy or other procedure available to the employer by law, including by setting it off against compensation owing to the employee that the employer has not yet paid to the employee.

Conflict with this Act

   6.  (1)  This Act prevails over any provision of a compensation plan and, if there is a conflict between this Act and a compensation plan, the compensation plan is inoperative to the extent of the conflict.

Same, other laws

   (2)  This Act prevails over any other Act and over any regulation, by-law or other statutory instrument.

Exception

   (3)  Nothing in this Act shall be interpreted or applied so as to reduce any right or entitlement under the Human Rights Code, the Pay Equity Act or section 42 or 44 of the Employment Standards Act, 2000.

Same

   (4)  Nothing in this Act shall be interpreted or applied so as to prevent the application of the insurance plan under the Workplace Safety and Insurance Act, 1997 to an individual to whom the insurance plan did not apply on the day this Act receives Royal Assent.

Compliance reports by employer

   7.  (1)  Every employer shall give the Minister responsible for the administration of this Act the reports that are prescribed concerning the employer's compliance with this Act.

Submission of reports

   (2)  Each report must be submitted in the prescribed form and manner and within the prescribed period.

Contents of reports

   (3)  Each report shall include a statement signed by the employer's highest ranking officer certifying whether the employer has complied with this Act.

Regulations

   8.  The Lieutenant Governor in Council may make regulations,

  (a)  governing how rates of pay, pay ranges and benefits, perquisites and payments provided under a compensation plan are to be valued;

  (b)  specifying any matter that is described as prescribed in this Act.

Commencement

   9.  This Act comes into force on the day it receives Royal Assent.

Short title

   10.  The short title of this Act is the Comprehensive Public Sector Compensation Freeze Act, 2013.

 

EXPLANATORY NOTE

The Bill freezes the annual compensation of employees in the public sector for a period of two years.