IN THE MATTER OF AN INTEREST ARBITRATION PURSUANT TO THE FIRE PROTECTION AND PREVENTION ACT, The Corporation of the City of Thunder Bay ( City )

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1 BETWEEN IN THE MATTER OF AN INTEREST ARBITRATION PURSUANT TO THE FIRE PROTECTION AND PREVENTION ACT, 1997 The Corporation of the City of Thunder Bay ( City ) and BEFORE Thunder Bay Professional Fire Fighters Association, Local 193, International Association of Fire Fighters ( Association ) James Hayes, Chair Michael Riddell, City Nominee Jeffrey Sack, Q.C, Association Nominee APPEARANCES For the Association Bob McCutcheon, Advocate, IAFF/OPFFA Mike Palachik, Assistant Advocate, IAFF/OPFFA Eric Nordlund, District 7 Vice President, OPFFA Dennis Brescacin, President, TBFFA, Local 193 Darren Smallwood, Secretary, TBFFA, Local 193 Rob Wark, Treasurer, TBFFA, Local 193 Rick LaHaye, Negotiation Member, TBFFA, Local 193 For the City Mark Mason, Counsel Maureen Panizza, Director of Human Resources & Corporate Safety Terry O Neill, Manager, Labour Relations Erin Anderson, Human Resources Consultant II Mark Smith, General Manager, Development and Emergency Services John Hay, Fire Chief Greg Hankkio, Deputy Fire Chief Dave Paxton, Deputy Fire Chief A hearing was held in Thunder Bay on June 1, Post-hearing written submissions followed. Executive sessions and teleconferences were held on various dates.

2 AWARD Introduction 1. This interest arbitration concerns the renewal of the Collective Agreement that expired on December 31, The bargaining unit consists of 206 full-time firefighters in a variety of classifications. Thunder Bay is the most populous municipality in Northwestern Ontario. Thunder Bay Rescue serves a population of approximately 110,000 in an area of square kilometers. The City has collective agreements with a number of other trade unions including police. Firefighters comprise approximately 13% of persons employed by the City. 3. In determining the outstanding matters, we have been guided by the criteria identified in Subsection 50.5(2) of the Fire Protection and Prevention Act, 1997 ( FPPA ). The FPPA legislated criteria include the following in addition to all factors the board considers relevant : 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 decision if current funding and taxation levels are not increased. 3. The economic situation in Ontario and in the municipality. 4. The comparison, as between the firefighters and other comparable employees in the public and private sectors, of the terms and conditions of employment and the nature of the work performed. 5. The employer s ability to attract and retain qualified firefighters. 4. The renewal Collective Agreement will consist of all matters agreed to by the parties and the following terms and conditions. Any proposals not referred to below are dismissed. 2

3 Salary Submissions City 5. The City provided its view of the financial matrix, relying principally upon a study conducted by BMA Management Consulting Inc., concluding: The economic situation in Thunder Bay and surrounding area continues to recover from the harsh economic downturn experienced over the last 10 years. Without making a formal ability to pay submission, the City argues that: Given that the economic situation in the City of Thunder Bay should be an overriding consideration in these proceedings this Board should be driven by the City s internal comparators, and in particular, the other settlements that were freely negotiated by the City of Thunder Bay and the other bargaining agents who represent City employees. 6. The City asks the Board to direct a three-year Collective Agreement with annual increases of 1.75% per year that it says would be consistent with those negotiated across the majority of the City s other bargaining units operating in a right-to-strike model. That is, the City argues that the relevant comparator group should consist of other municipal bargaining units excluding police. The City does not suggest a firefighter group to be used for comparative purposes on the salary issue. 7. In the alternative, the City submits that the Board should replicate Thunder Bay police ( TBP ) wages for a three-year Thunder Bay fire ( TBF ) Collective Agreement. The City points out that there has been a dollar-for-dollar match in fire/police salaries for years. However, the City in written Rebuttal Submissions is careful to emphasize that: The City has long advocated against the concept of police/fire parity 3

4 8. The TBP agreement provides for the following increases effective January 1 st of each year: 2.25% (2015); 2% (2016); 2% (2017); 2% (2018); 2.40% (2019). Association 9. The Association rejects the City s reliance upon settlements reached with bargaining units other than police. It accepts that police/fire parity in Thunder Bay has been the norm but takes strong exception to maintaining parity with local police in this round. 10. The Association presents a proposed comparator group for salary purposes and relies upon a Table disclosing firefighter wages obtained in eleven other municipalities between 2003 and It identifies salaries freely negotiated by Barrie, Kitchener, Oakville, Sarnia, and Vaughan between 2015 and The Association seeks wage increases that would move toward closing, not widening, the gap with its proposed comparators. The Association does not ignore TBP but emphasizes its selected fire comparator group. It asserts that the TBP settlement was abnormally low as there were other substantial non-wage improvements. 11. The Association responded to the City s submissions concerning the economic situation in Thunder Bay with reference to the following excerpts from the 2016 Standard & Poor Annual Credit Rating Summary that revised the City s credit rating upward from stable to positive: The outlook revision reflects our opinion that, in the next two years, the city will continue to demonstrate healthy operating balances and decreasing after-capital deficits of less than 5% of adjusted total revenues, a low debt burden, and exceptional liquidity balances such that the overall credit profile would be consistent with a higher rating. The ratings on Thunder Bay reflect S & P Global Ratings opinion of the city s strong budgetary flexibility, low debt burden, average and improving budgetary performance, and exceptional liquidity. The ratings also reflect our view of 4

5 Thunder Bay s strong economy, the very predictable and well-balanced institutional framework for Canadian municipalities, satisfactory financial management practices, and low contingent liabilities. 12. The Association submits that the following across the board adjustments should be implemented on January 1 st of each year: 3% (2015); 2.75% (2016); 2.5% (2017, 2018, 2019). City response 13. The City submits that the Association proposal would destroy the historical bargaining relationship between TBP and TBF. It emphasizes that, by 2019, TBF would move ahead of TBP by $2,576 and past Barrie, Kitchener, and Vaughan to a ranking not previously reached. The City points to previous arbitration awards where police/fire parity was maintained in Thunder Bay. The City resists the Association s characterization of the police settlement as low on wages due to other benefit increases. It points to other police settlements that have emerged in the post-2015 period with lower percentage increases than are sought here by the Association. Salary Discussion Fire and Police Comparators 14. Both parties urge the Board to reject the traditional relationship between fire and police salaries in Thunder Bay. 15. We do not accept the City s primary position that firefighter wages should be driven by the City s internal comparators, comparators excluding police. In our view fire and police comparators provide a more useful perspective. 5

6 16. We accept that the long history of virtual fire/police salary parity in Thunder Bay should command significant respect. Parity has been a stable driver of fire wage determination in Thunder Bay for a lengthy period. Particularly in circumstances where there are no clear direct fire comparators, the TBP comparator should be given full value. 17. We also accept that the Association is entitled to proffer, and that the FPPA obliges us to consider, firefighter comparators both with respect to salary and all other issues. Consideration of the TBF situation may not be restricted entirely to the experience of local police particularly in a round of provincial fire bargaining where a number of freely collectively bargained fire settlements have run appreciably ahead of local police wage rates. 18. However, it is obvious that the TBF case presents a challenge in this regard. The City did not propose an alternative fire comparator complement presumably because its position on wages was grounded upon comparisons with local police and other internal bargaining units. And, in fact, there are no arguable fire comparators located in geographic proximity to Thunder Bay. In Northern Ontario, Sault Ste. Marie is somewhat smaller and Sudbury somewhat larger in population. Timmins has less than half the population of Thunder Bay. The group proposed by the Association did include Sudbury but neither party made any reference to Sault Ste. Marie or Timmins. 19. In these circumstances the Association s proposed fire comparator group must be cautiously appraised. All of the municipalities identified therein, excepting Sarnia, have population sizes greater than Thunder Bay. 20. Review of the information provided discloses the following. 6

7 21. The City s police/fire parity submission is confirmed on the facts. There have been negligible differences in police and fire wages since Salaries have been identical since Thunder Bay and Sarnia fire salaries have ranked lowest in the group since 2003 with rare exception. Having said that, what is most striking is that there has been significant wage rate compression over time. By the end of the expiring collective agreement in 2014, the gap between Thunder Bay fire and the group average had been nearly eliminated. It had fallen from $2,097 in 2003 to $288 by Just as noteworthy, the gap in 2014 between Thunder Bay fire and the highest paid proposed comparator had fallen from $2,843 in 2003 to $844 (Oakville) by The 2014 gap between TBF and Barrie was $599. Conclusion 23. There are serious problems with the positions taken by both parties concerning wages. Both positions would result in a marked departure from where the parties collective bargaining relationship stood at the expiry of the current agreement. Both positions are unacceptable. 24. If the Association proposal were awarded, there would be a dramatic realignment of wage rates resulting in the following fire premiums over local police: $677 (2015); $1,386 (2016); $1,891 (2017); $2,418 (2018); $2,576 (2019). The Association proposal would also take fire rates above Kitchener, Vaughan, and Barrie by Such a substantial fire wage premium over police, expanding each year, cannot be projected as the likely outcome in a free collective bargaining process. 26. On the other hand, if the City proposal were awarded, Thunder Bay firefighters would fall below their colleagues in all other cited jurisdictions to an extent not seen 7

8 since at least As previously noted, Sarnia and Thunder Bay typically ranked lowest in the proposed comparator cohort. Maintenance of fire/police parity in Thunder Bay would cause salaries to sink far below Sarnia, a smaller municipality where wages have not differed appreciably from TBF since A wage gap of $823 in 2015 would double to $1791 in By way of further example, the wage gap in favour of Barrie over Thunder Bay fire would move to $854 (2015), $1,351 (2016) and $1872 (2017). 27. In other words, to replicate local police wages without adjustment would be tantamount to ignoring all firefighter comparators altogether. Such an outcome would instantly eradicate the history of salary compression achieved by the Association over many years. In 2014, Thunder Bay fire/police wage parity rested easily with firefighter salaries paid in other Ontario communities both larger and smaller. However, should TBF follow local police at this time, it will do so no longer. 28. The salaries awarded below represent our judgment as to what would constitute a fair replication of free collective bargaining in Thunder Bay in this round. We conclude that the local police comparator should be given significant weight having regard to the long history of fire and police wage parity in this community. We also accept that it is proper to take into account firefighter wages elsewhere. We would not see a salary outcome as appropriate if it were to badly distort the relationship of TBF wages with those freely negotiated by other fire groups in the province. Salary Award 29. We award the following first class firefighter wage rates: January 1, 2015 $92,395 January 1, 2016 $94,490 January 1, 2017 $96,630 8

9 30. The salaries for all other classifications shall be adjusted accordingly. Term 31. January 1, 2015 until December 31, Retroactivity 32. To be paid within 60 days to current employees and within 90 days to those who have left the bargaining unit. Rank Differentials 33. As of January 1, 2017: Fire Prevention Officer (110%); Division Chief (130%). Sunset Clause 34. New article: All disciplinary notations on a firefighter s personal record will not be recognized after a period of two years except where there is a repetition of an offence which results in a suspension within 48 months. 24-hour Shift Trial 35. Previously awarded. Board to continue to remain seized. Work Schedule/Day Shift Employees 36. Association proposal awarded, excepting Administration Division. 9

10 Time Off in Lieu 37. Banked at 1.5 x for non-suppression employees. Emergency/Dependent Care Leave 38. Association proposal granted for up to 3 days of leave per year. Pregnancy and Parental Leave 39. Amend current language to provide for top-up of payments received from employment insurance to 75% for maternity leave to a maximum of 15 weeks, for parental leave to a maximum of 10 weeks. Applicable on a go-forward basis. Paramedicals 40. Increase entitlements: physiotherapy ($900); massage therapy ($700). Health Spending Account 41. We express no opinion as to the merits of such a proposal given the insufficiency of cost information. Existing Letters of Understanding 42. The parties are requested to advise the Board forthwith, with an explanation in writing, if there is any issue between them concerning the renewal of any existing Letters of Understanding. In the absence of any objection, we direct their renewal. 10

11 Board To Remain Seized 43. The Board will remain seized until the parties enter into a formal Collective Agreement. Dated at Toronto, this 23 rd day of August, James Hayes See attached Michael Riddell See attached Jeffrey Sack, Q.C. 11

12 Dissent of City Nominee I have reviewed the Award of the Chair in this matter, and I dissent on the issues of Salaries, Differentials and Emergency/Dependent Care Leave and the Chair s failure to award the City s position on grand parenting the payout on used sick leave credits. I would also express my disappointment in the unjustified delay in issuing an Award almost a year after receiving the final Submissions of the Parties and a few months before this replacement Collective Agreement expires. Such delay is not supportive of good and harmonious relationships between the Parties. On the issue of Salaries between 2003 and 2014, there has been wage parity between Thunder Bay Police and Thunder Bay Firefighters. The Award of the Chair results in Firefighters receiving more than Police rates by $127 in 2015, $376 in 2016 and $634 in The Chair appears to justify ignoring this compelling historical pattern by considering the salaries of Firefighters in cities such as Sarnia and Barrie that are both located more than 1200 km. from Thunder Bay. In replicating the outcome of negotiations in a right to strike regime, the City would never agree to depart from the historical parity between Thunder Bay Police and Thunder Bay Firefighters. Moreover, I respectfully suggest that if Firefighters had the right to strike, that right would not be exercised to attempt to achieve that result and if it were exercised it would not be successful. In a recent Award for Toronto Firefighters, the same Chair restores the salaries for Firefighters, to Police Fire parity in 2018, and that should be the result in the next round of bargaining in Thunder Bay. The Chair s Award to increase the Salaries for Fire Prevention Officers and Division Chiefs by an additional two percent in 2017 is not justified. Usually such salary improvements are justified by changes in duties or consideration of 12

13 compelling comparator data. No such justification was presented to our Board of Arbitration. On the issue of Emergency/Dependent Care Leave, the Chair has awarded up to three days of leave per year. This provision does not meet the criterion of being a normative and pervasive provision in other Collective Agreements in this sector. Moreover, since the Parties are implementing a 24 Hour Shift schedule, what is meant by a day on this issue? The Award of the Chair rejects the City s proposal to eliminate the entitlement that after ten or more continuous years of service, a Firefighter or estate shall be entitled to fifty percent payout on any unused sick leave credits or one-half year s salary whichever is less, payable on termination, death or retirement. Such payouts have been eliminated for employees of the Ontario Government, Ontario School Boards, Community Colleges, and many other Public Service Employees in Ontario. This entitlement costs the City approximately $450,000 per year, which is funded by taxpayers, most of who are not entitled to this expensive and outdated benefit. Our Board of Arbitration should have awarded the City s reasonable proposal on this issue. Dated at Toronto, Ontario this 21st day of August, Michael Riddell City Nominee 13

14 Partial Dissent of Association Nominee While the City s nominee urges that the Board follow local police wages alone, the Chair has, consistently with arbitral precedent, chosen to take into account the wage rates of both local police and comparable firefighter groups. In this regard, all interest arbitrators in Ontario are agreed that, in setting wage rates for firefighters, consideration should be given to the wage rates of local police and comparable firefighter groups. This exercise includes consideration of municipalities in the same geo-economic region, as well as municipalities elsewhere in Ontario that are of a similar size, and looks at relative wage relationships among firefighters in a broad segment of municipalities across the province. Here, the Chair has noted the gradual compression of Thunder Bay firefighter wage rates and firefighter wage rates in other municipalities. Thus, in 2003 a gap of $2,751 existed between firefighter wage rates in Sudbury and those in Thunder Bay; by 2014 the gap had narrowed to $541. There is no reason to believe that this trend will not continue. Contrary to what the City s nominee asserts, the increases in pay differentials for specific ranks are in fact justified by superior rates for the same classifications in comparable municipalities. With respect to the payout on retirement of unused sick leave credits, the City s nominee argues that the board should discontinue this benefit for firefighters. However, a large number of municipalities in Ontario, 14

15 employing the vast majority of firefighters in the province, have agreed to settlements with firefighters that have maintained the payout of unused sick leave credits. This is for good reasons, including provincial patterns, the inadequacy of alternatives, and total compensation comparisons as between police and firefighters. Although the issue has been addressed at fire sector interest arbitrations on at least nineteen occasions, in every case the arbitration board has declined to eliminate this benefit for firefighters. As for emergency/dependent care leave, this is an emerging benefit and therefore the yardstick is not what is normative, but what is the trend. In this regard, it is now widely recognized that employees need leave from work to attend to children and other family members who are sick, and the number of municipalities that accept this reality is steadily growing to the point where, as in Kenora, arbitrators are prepared to include it in collective agreements. On the whole, while I would have awarded additional and in some respects different monetary and non-monetary changes, it must be acknowledged that the Chair has sought to balance and accommodate the interests of both the firefighters and the City, in light of the criteria in the Fire Protection and Prevention Act. 15