Tuesday, 13 November 2018

Union Successful at Interest Arbitration – prevents contracting out, secures wage increases and other benefits

In a recently released interest arbitration decision the Amalgamated Transit Union (the union) successfully argued against the employer’s (the TTCs) efforts to water down formerly negotiated protections and was awarded a new three-year collective agreement which covers some 11,000 operators, collectors and maintenance workers. Among the several aspects of the award is a wage increase, with the union set to receive a 6% wage increase over three years. Central to the case was identification of an appropriate comparator.

In Toronto Transit Commission v Amalgamated Transit Union, Local 113, 2018 CanLII 99135 (ON LA) the ATU disputed the employer’s intention to fundamentally alter the collective agreement, and to alter it in such a way as to remove the negotiated contracting out provisions, to eliminate the Sunday premium (an additional .25 cents per hour) as an “antiquated concept”, and to introduce a part-time workforce. The employer also sought a wage settlement that would mirror those negotiated at the City of Toronto and the wage agreements negotiated with smaller unions.

The employer justified the fundamental changes it sought on the basis that they were necessary for “collective agreement modernization, to meet service needs and to position the organization for long-term economic viability.”
The union rejected any concessions and took the position that it should achieve further economic and other gains based on long-established bargaining patterns. In compliance with principle of replication, the union sought comparability with freely bargained sector norms – meaning other public transportation systems.


Arbitrator Kaplan stated that no particular interest arbitration criteria has primacy. That being said, he noted that replication theory, an arbitral doctrine which holds that an interest arbitrator

should strive to replicate the agreement which the parties themselves would have reached by a process of free collective bargaining, is among the most important. Replication criterion is also often the most disputed as it involves the identification of an appropriate comparator.

As stated above, the TTC took the position that its operators, collectors, and maintenance workers should be compared to City of Toronto employees and the wage outcomes reached at the City, along with those that were agreed-upon (or awarded) with several much smaller TTC unions. The TTC argued that these settlements should drive the determination of the wages in the collective agreement with the union. The union argued that the only appropriate comparators were other public transportation systems.

The arbitrator agreed with the union and found that the most appropriate comparators were other transit services. In this case, Metrolinx and Mississauga MiWay and Brampton Transit. The bargaining results at GO Transit were also instructive.

Kaplan also considered that the doctrines of gradualism and demonstrated need were important. However, he found that drastic change absent compelling and demonstrated need is not a normal feature of interest arbitration, a process that has been characterized as conservative and incremental. According to Kaplan, breakthroughs – for either the union or the employer – are only ever justified in the most compelling of situations with facts that didn’t apply in this case.

In the result, Kaplan denied the TTC’s efforts to “modernize” the collective agreement, prevented the TTC from incorporating language to allow contracting out, and awarded wage increases to the union of 6% over three years.


In 2011 the provincial government declared the TTC an essential service, which had removed the union’s ability to strike. While interest arbitration was effective in resolving the issues in this case, it’s a poor substitute for the Charter-recognized right to strike. Preventing or banning the right to strike for certain workers may actually increase costs to the public employer since disputes need to be settled by interest arbitration. That being said, and while there are a lot of concerns with interest arbitration, the result in this case was favourable and will serve as a reminder to employers that collective agreements cannot be drastically changed without compelling circumstances that make such change necessary.

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