IN THE MATTER OF AN INTEREST ARBITRATION ONTARIO POWER GENERATION. and THE SOCIETY OF UNITED PROFESSIONALS

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1 IN THE MATTER OF AN INTEREST ARBITRATION BETWEEN ONTARIO POWER GENERATION ( OPG ) and THE SOCIETY OF UNITED PROFESSIONALS (the Society ) SOLE MEDIATOR-ARBITRATOR: John Stout APPEARANCES: For OPG: Sunil Kapur McCarthy Tetrault LLP Dave Milton Bruce Robertson Matt Dowdle Alex Kogan Eugene Kosziwka Peter Hassan Tracy Bower Patrick Pengelly Simmy Sahdra For the Society: Michael Wright Cavalluzzo LLP Joseph Fierrro Alex Saba Frank Pearce Leon Simeon Ross Mahadeo Rebecca Caron Ed Hellier Ralph Chatoor Sonia Pylyshyn Kathryn Bell David Michor MEDIATION-ARBITRATION HEARINGS HELD IN TORONTO ONTARIO ON OCTOBER 30, 31 AND NOVEMBER 7, 2018

2 INTRODUCTION [1] I was appointed by the parties as mediator-arbitrator to resolve all issues remaining in dispute between them with respect to a renewal collective agreement. My appointment and the scope of my jurisdiction is provided for under article 15 of the current collective agreement, which provides the process and criteria for voluntary interest arbitration between these two parties. Article 15 provides as follows: Future contract negotiations disputes shall be resolved by binding arbitration. The dispute resolution process shall be mediation-arbitration using the same individual as both mediator and arbitrator. The negotiating process is set out in full in Appendix VII. The mediator-arbitrator shall consider the following issues as relevant to the determination of the award on monetary issues: a) A balanced assessment of internal relativities, general economic conditions, external relativities; b) OPG need to retain, motivate and recruit qualified staff; c) The cost of changes and their impact on total compensation; d) The financial soundness of OPG and its ability to pay. A mediator-arbitrator shall have the power to settle or decide such matters as are referred to mediation-arbitration in any way he/she deems fair and reasonable based on the evidence presented by representatives of OPG or The Society in light of the criteria in items (a) to (d) and his/her decision shall be final and binding. [2] The parties filed extensive and well organized briefs, with numerous exhibits and authorities, presenting their positions on the issues remaining in dispute. All information found in the briefs and other submitted material were reviewed, including additional information provided at the arbitration hearing. [3] The parties met with me and engaged in mediation on October 30 and 31, Unfortunately, the parties were unable to resolve the issues remaining in dispute. The arbitration hearing was held on November 7, 2018, at which time the parties made oral presentations to supplement their written submissions. 2

3 BACKGROUND [4] Ontario Power Generation (OPG) is a corporation wholly owned by the Province of Ontario (the Province ). OPG was incorporated on April 1, 1999 as one of five successor companies of Ontario Hydro. The Province, as sole shareholder, appoints OPG s Board of Directors and has specifically mandated OPG to operate as a commercial enterprise. [5] OPG operates the majority of electricity generating assets of the former Ontario Hydro. OPG has the following generating stations: Three nuclear stations (Pickering A, Pickering B and Darlington) Three thermal stations (Lennox, Thunder Bay and Atikokan) Sixty-six hydroelectric stations; and One wind turbine [6] The Society of United Professionals (the Society ) represents approximately 8,000 members, most of whom are employed by successor companies of the former Ontario Hydro, including Bruce Power, Hydro One, and the Independent Electricity System Operator (IESO). The Society also represents lawyers employed by Legal Aid Ontario and the Chinese Southeast Asian Legal Clinic and employees of the National Judicial Institute. [7] Society represented employees at OPG include engineers, project managers and scientists, as well as other supervisory, administrative and technical professionals. A number of the Society s members employed at OPG are licensed by the Canadian Nuclear Safety Commission (CNSC) and are responsible for supervising and training other licensed employees. A majority of the Society members have a post-secondary education, including advanced university degrees in fields such as engineering and finance. There is no dispute that the Society s members are highly skilled and many have expertise and unique skills related to nuclear power generation. 3

4 [8] OPG employs approximately 6,000 regular employees of whom around 88 percent are unionized and covered by collective agreements. The Power Workers Union (PWU) represent the largest group of regular employees with 4,075 members. The Society represents approximately 3,220 regular employees. There are also 1,091 non-union management employees, which represents about 12 percent of the regular workforce. [9] There are currently 11,928 former employees, survivors and dependents receiving pensions from the OPG Pension Plan. 3,791 of these former employees were represented by the Society during their employment. [10] The former Ontario Hydro enjoyed a near-monopoly on the sale and generation of electricity in Ontario. However, since the restructuring of Ontario Hydro, competition has been introduced into Ontario s electricity market. Currently OPG s market share is approximately 50% of Ontario s electricity market. [11] At the same time, it is worth noting that the demand for electricity in Ontario has declined since the mid 2000s. The decline was precipitated by the 2008 recession that resulted in many industrial customers leaving Ontario or closing down. Demand has also contracted due to ongoing conservation efforts. [12] OPG s Pickering nuclear stations will soon be at their end of life and operations are scheduled to cease by Once the Pickering nuclear stations shutdown, OPG will lose 30% of their electricity production. This additional reduction in electricity production will result in OPG s market share declining to 40% of the Ontario electricity market. As a direct result of the cessation of generation at the Pickering nuclear stations, it is anticipated that up to 4,000 OPG employees will be laid off at a cost of approximately $2 billion. The Society represents approximately 30% of these adversely affected employees. [13] In 2015, OPG and the PWU negotiated a Mid-Term Agreement to address the Pickering End of Commercial Operations (PECO). The 2015 PECO Mid-Term 4

5 Agreement provided for a new category of employee, known as Term Employees. The Term Employees were hired to avoid adding regular staff in circumstances where additional regular employees are likely to be laid off as a result of the two Pickering nuclear stations end of commercial operations. Term Employees are hired with the understanding that they have no expectation of ongoing employment once the Pickering nuclear stations are safely shut down. [14] OPG is regulated by the Ontario Energy Board (OEB), pursuant to the Ontario Energy Board Act, As the regulator, the OEB determines the rates that OPG can charge for its nuclear-generated electricity and its regulated hydroelectric plants, which account for 90% of OPG s energy production. OPG is the only electricity generator in Ontario that has its rates set by the OEB. The majority of OPG s market competitors benefit from price and revenue certainty provided by contractual arrangements with the Province, through the IESO. As a result, OPG provides electricity that is approximately 40% lower than the average rate of other electricity generators. [15] The OEB requires OPG to file a rate application, which includes voluminous material on business planning, projected operating costs (i.e. Operations, Maintenance and Administration ( OM&A )), capital expenditures, production forecasts and efforts to control costs for the benefit of ratepayers. The OEB then reviews the application and sets rates based on the level of operating costs that they find reasonable and prudent and the OEB-prescribed return on deemed equity capital invested by the Province in the regulated assets. OPG has the onus of demonstrating that its costs are reasonable and prudent. If the OEB is not satisfied with OPG s submission, then the recovery of the requested costs is disallowed. The OEB has broad discretion in the manner that it assesses whether the proposed costs meet the standard for being recovered, see Ontario (Energy Board) v. Ontario Power Generation Inc SCC 44. [16] The OEB has made significant disallowances to amounts requested by OPG in rate applications. Since 2008, the OM&A cost disallowances have steadily risen 5

6 and cumulatively are $1.3 billion. The OEB has expressed, on a number of occasions, concerns about the level of compensation of OPG staff. These concerns include wages, benefits and pensions. [17] On December 28, 2017, the OEB issued a decision on OPG s most recent rate application for the period The rate order, authorizing the new rates with an effective date of June 1, 2017, was issued by the OEB on March 29, The cumulative effect of the decision and rate order was a reduction of OPG s requested revenue by approximately $1 billion over the five year period. [18] The Society points out that despite the challenges of lower demand and vigorous regulation, OPG s net income has grown over the last six years from $367 million in 2012 to $860 million in The Society s material also indicates that OPG s net income is projected to be approximately $1 billion in 2018 and $948 million in [19] Most recently, there has been a strong public and political focus on the price of electricity in Ontario. The price of electricity has been a very significant issue for both the previous Liberal Government and the current Progressive Conservative ( PC ) Government. Both the previous and current Governments have implemented measures to reduce the price of electricity. The PC Government has committed to reducing electricity prices by a further 12%, over and above the reductions implemented by the previous Liberal Government s Fair Hydro Plan. While the PC Government has not indicated precisely how they will achieve their stated price reduction, it is not inconceivable that OPG may be adversely affected by any Government initiative. [20] The collective bargaining relationship between the parties is mature. The parties bargaining relationship originated with the former Ontario Hydro and has continued with the successor generating company OPG. 6

7 [21] Since 1993, all collective agreements between the parties have included a clause, similar to the current article 15, requiring that future contract negotiation disputes shall be resolved by binding mediation-arbitration using the same individual as both the mediator and the arbitrator. In effect, the parties have voluntarily agreed to forgo their right to strike and lockout by agreeing to an interest arbitration process to resolve their collective agreement negotiation disputes. Article 8 permits the parties to amend this mediation-arbitration process and revert back to their right to strike and lockout by giving notice. [22] The bargaining between the parties has varied over the years, with both negotiated settlements and agreements imposed by mediation-arbitration. The collective agreement between the parties was freely negotiated. The following agreement between was awarded by Arbitrator Kevin Burkett. The collective agreement was imposed by Arbitrator Chris Albertyn. The most recent collective agreement between was mostly a negotiated settlement, save and except for one issue dealing with the Purchased Service Agreement (PSA) Letter of Understanding #193 (LOU #193) and suspension of article 67. LOU #193 generally permits the contracting out of work to third-party vendors without following the joint process found in article 67. The one issue in dispute was the application of article 67 to work performed in 2019 or beyond pursuant to a contract issued prior to 2019, if LOU #193 expired and was not renegotiated. I addressed this lone issue in an award dated July 12, [23] OPG and the PWU, on the other hand, have retained their right to strike and lockout. The negotiated agreements between the PWU and OPG have been considered a relevant internal comparator by both parties. [24] There is a strong correlation between the wage increases negotiated by the PWU and the wage increases that the Society achieves in bargaining and at interest arbitration. From 1999 until 2013, there existed a 0.5% difference in favour of the PWU increases when compared to the Society increases. This difference grew as the result of an April 8, 2013 award issued by Arbitrator Albertyn (the Albertyn Award ). 7

8 In the Albertyn Award, the Society received significantly lower wage increases than the PWU. Arbitrator Albertyn essentially found that while the PWU received increases of 2.75% in each year of a three-year agreement, the net cost to OPG was really only 0.75%. As a result of the Albertyn Award, the internal relative wage gap between the PWU and Society was widened. The Society sought judicial review of the Albertyn Award, which was dismissed by the Divisional Court on November 27, [25] Most recently, and relevant to the matter before me, the PWU and OPG negotiated a Memorandum of Agreement on June 4, 2018 (the MOA ) to renew their collective agreement, which had expired on March 31, The MOA was subject to ratification and generally included the following: Wage increases: 1.8% (April 1, 2018), 2.0% (April 1, 2019), 2.0% (April 1, 2020), 0.8% (February 1, 2021) Improvements to overtime and shift premium payments Amendments to the 2015 PECO Mid-Term. A number of health and dental amendments, which the Society has also agreed to in bargaining. [26] On August 9, 2018, the results of the PWU ratification vote were announced and 54% of the PWU members rejected the MOA. After the failed ratification vote, the PWU and OPG met again but they did not agree to any amendments or modification of the MOA. Instead, it was agreed that a second or final vote on the original MOA would be held, with the results being announced on December 13, Subsequent to the hearing of this matter, I was advised that the PWU bargaining unit rejected the MOA by a margin of 57%. The PWU and OPG collective agreement will now be settled by interest arbitration, see Bill 67, Labour Relations Amendment Act (Protecting Ontario s Power Supply) [27] On May 31, 2018 OPG and the Society exchanged bargaining agendas. Two party bargaining took place between June 18 and July 6, The parties agreed to a number of items, including a number of health and dental amendments that OPG 8

9 had agreed to with the PWU. It is agreed that these agreed upon items will be included in the renewal collective agreement. THE ISSUES IN DISPUTE [28] The issues remaining in dispute in this matter are as follows: Society A one year term A 3% wage increase, plus a 1% one-time catch up payment on January 1, 2019 Amendments to Article 58 - Travel time Amendments to Article 34 Temporary employees; and, Increased reimbursement for vision care from $600 to $650. OPG A three year term Wage increases of 1.5% each year Suspension of article 67 PSA new LOU #196 New proposal re: PECO new LOU #197 Amendments to Article 34 Temporary employees (seeking a concession) Amendment to Article 64 Employment continuity (seeking a concession) Amendment to the Pension Plan seeking a concession Suspension of Article 24 Escalator clause Amendment to Article 57 Overtime (seeking a concession) Amendment to the Benefit Plan Introduction of caps to physiotherapy [29] Generally, the Society seeks a one year collective agreement with wage increases to address what they consider to be an unacceptable gap between internal and external comparators. The Society also seeks increases to travel time allowances to address an unfavourable arbitration ruling. The Society s proposal with respect to Temporary Employees includes providing such employees with benefits. Finally, the Society seeks an increase to the vision care benefit, which has not been increased in quite some time. 9

10 [30] OPG is seeking a three year collective agreement with more modest wage increases. OPG wishes to continue to operate with the suspension of Article 67 (PSA) pursuant to a new LOU. OPG s major proposal and the focus of much debate between the parties is a new LOU with respect to PECO. The OPG proposal is similar to the 2015 PECO Mid-Term they have with the PWU, providing for the utilization of Term Employees until staff are no longer required at the Pickering nuclear stations. OPG also seeks to expand the use of Temporary Employees. OPG also has a number of concessionary proposals to reign in labour costs. ANALYSIS [31] As stated earlier, the parties have voluntarily agreed to have their collective agreement negotiations resolved by interest arbitration. In this regard, one cannot lose sight of the fact that the parties were not forced to forgo their right to strike and lock out. Rather, they have agreed that it is in both their interests to leave the resolution of any dispute to a third-party mediator-arbitrator, who has the discretion to make an award, subject to considering certain enumerated criteria. [32] Article 15, grants a mediator-arbitrator wide discretion to make a fair and reasonable decision taking into consideration the enumerated criteria, as well as any other relevant matter. The criteria found in article 15 provides general guidance and reflects the market forces and economic realities that the parties consider to be the most relevant considerations that affect their bargaining on monetary items. However, the criteria is not exhaustive and the parties have not limited the mediator-arbitrator s discretion to consider other relevant factors. If the parties intention was to limit the arbitrator-mediator s jurisdiction, then much clearer language would have been used to limit the mediator-arbitrator s discretion to only the enumerated criteria. In the absence of such clearly limiting language, the mediator-arbitrator has wide discretion to decide matters in any way she or he deems fair and reasonable. Accordingly, it is my view that other objective evidence may be given consideration during the exercise, including the extensive arbitral jurisprudence, and the conduct of the parties (established historical patterns for example). 10

11 [33] In addition to the criteria that the parties agreed to in article 15, there are general principles which govern interest arbitration. The most important and guiding principle applicable to all interest arbitration proceedings is replication. Arbitrator Burkett addresses the importance of replication, while considering language similar to that before me, in his decision Bruce Power LP and Society of Energy Professionals (2004), 126 L.A.C. (4 th ) 144 at page 152 where he stated: One of the guiding principles of interest arbitration, whether public or private sector, is replication. It is accepted that an interest arbitrator ought to attempt to replicate the result that would most likely flow from free collective bargaining. It follows from all of the foregoing that when the subject matter of an interest arbitration is a private sector dispute, as here, the financial wellbeing and economic viability of the employer are relevant considerations. This is not to say that normative increases are to be ignored. Rather, normative increases form a base line from which deliberations commence. The decision as to whether or not to adopt or to deviate from the baseline is thus made, in part, on the basis of the economic viability of the enterprise, both real and projected. [34] As indicated by Arbitrator Burkett, it is well accepted that interest arbitration is an extension of free collective bargaining and the goal of interest arbitration is to replicate, as closely as possible, the results that the parties would have reached had they freely negotiated the terms of their collective agreement. [35] The replication exercise is an objective one, that is driven by objective evidence. The subjective posturing of either party is not helpful nor is it relevant to the exercise because it is easy for either party to take a hard-line and refuse to bargain when there is no threat of a strike or a lockout. What is most important, and the focus of deliberation in the process, is determining what the parties would have agreed upon had they been faced with the prospect of a strike or lockout. The decision is driven by objective evidence, including evidence of relevant comparators, both internal and external, either freely negotiated or imposed by arbitration. There is much room for debate on the final result, but interest arbitration is not an exact science and the appropriate outcome is one that falls within a reasonable range of what the parties would have agreed upon in free collective bargaining based on the relevant comparators. As stated by Arbitrator Teplitsky Q.C. in his August 31,

12 award between A Group of 46 Hospitals and SEIU, Locals 183, 204, 268, 478 and 532, the goal of compulsory binding arbitration is to ensure that the parties affected by the loss of the right to strike fare as well, although not better than, those parties whose settlements are negotiated within the context of the right to strike. [36] It is also well accepted that interest arbitration is a conservative process and that a party seeking changes must show a demonstrated need before an interest arbitration board will address what change is acceptable, see Ten London Area Nursing Homes and London and District Service Workers Union, Local 220, unreported award dated June 15, 1987 (Stanley). The arbitral principle is explained by Arbitrator Michel Picher in Independent Electricity System Operator and the Society of Energy Professionals, unreported award dated December 17, 2009: While it is true that the changing economic conditions might well justify an adjustment in any aspect of the wage treatment of bargaining unit employees, the conservative nature of interest arbitration generally manifests a certain reluctance to awarding breakthrough measures or provisions. The conventional wisdom is that to the extent that interest arbitration seeks to replicate the outcome which might have resulted from free collective bargaining, it is somewhat questionable for boards of interest arbitration to fashion or strike down significant monetary or non-monetary hallmarks within the framework of a collective agreement. It is considered that such measures, if they are to be achieved, are best achieved through the give and take of bargaining between the parties rather than the order of a third party. [37] The focus of this round of bargaining is OPG s proposal for a LOU addressing the end of Pickering nuclear operations and the use of Term employees, similar to the 2015 PECO Mid-Term that OPG and the PWU agreed upon. This is a significant alteration to the status quo that will produce significant savings for OPG. There is no doubt that the sun is setting on the Pickering operations with the scheduled shut down in The closure of the Pickering nuclear stations will be a significant event that will impact OPG and its employees. The Society and its members clearly will be affected by this imminent event. I agree with OPG that there is a demonstrated need to address the issue, but I also agree with the Society that the issue is complicated and it is not as easy as taking the terms of the 2015 PECO Mid-Term and applying it to the Society and their members. The Society and the 12

13 PWU have different needs and priorities as their members engage in different work functions, each complimenting the other in the OPG business. The parties are always best positioned to resolve such significant issues, or at least they ought to be given every chance to do so before an arbitrator wades into the fray. As I stated in my previous award between these two parties, Ontario Power Generation v. The Society of Energy Professionals 2016 CanLII (ON LA): I am of the view that an arbitrator or arbitration board should encourage further negotiation by the parties to amicably resolve their disputes without the need for the intervention of a third-party. Ultimately, it is the parties who are best positioned to resolve their differences. An arbitrator or arbitration board ought to be careful not to disrupt the balance of bargaining power. To this end it would not be fair or reasonable to unduly undermine the position of one party. [38] I am of the opinion that the parties would benefit from an additional opportunity to engage in free collective bargaining before having the issues of PECO imposed upon them by an arbitrator. Further, given the uncertainty surrounding the current status of the PWU MOA, it makes sense to defer for a short period of time. In my view, the uncertainty surrounding the PWU situation has been a distraction that has handicapped the current round of bargaining. The parties may be more successful after the dust has settled and the PWU collective agreement has been resolved. Therefore, I am of the view that a one year term is appropriate in these circumstances. I acknowledge that there are other options, such as remitting back the PECO issue to the parties. However, there are too many moving pieces in my opinion and the parties should not have their hands tied in trying to craft a result that would best serve both their needs. [39] Having outlined the general principles applicable to interest arbitration and determined that the renewal collective agreement will be for a one year term, I now turn to consider the article 15 criteria. [40] A consideration of internal relativities relates to a comparison of the compensation received by those OPG employees other than the employees 13

14 represented by the Society. The relevant internal comparators are management employees and PWU members working at OPG. [41] The Society submitted information relating to the Executive Compensation Program for management positions at OPG and data from the Public Sector Salary Disclosure Act (PSSDA). While I appreciate that some management positions have received significant wage increases, other management positions have not. Furthermore, management employees were subject to the previous Liberal Government s wage restraint policy, see Ontario Power Generation and the Society of Energy Professionals, unreported award February 11, 2011 (Burkett). It does not surprise me that management salaries may now be increasing. However, it does not necessarily follow that the Society members, who were not subject to government wage restraints, should be able rely on such increases granted in a very short period of time after an extended period of restraint. [42] The PWU freely negotiated a MOA that has twice been rejected by the PWU membership. The PWU and OPG collective agreement will now be subject to interest arbitration. The MOA calls for an average 2.2% wage increase over three years as well as increases to overtime and premium pay. The Society and OPG have already agreed to other benefit increases that are included in the MOA. [43] The general economic conditions are neither sunny nor gloomy in my opinion. The Society points to relatively strong economic conditions related to GDP and unemployment. OPG on the other hand points out the growing Provincial deficit and suggests that real GDP growth is slowing down. My view on economic conditions is guarded at best, although I can say that nothing suggests to me that anything other than a normative wage increase ought to be given. [44] In terms of external relativities, I am required to look at external employers employing employees in a similar capacity in a similar market. The most relevant comparators being those situations that are similar to the matter at hand. In this case, the legacy Ontario Hydro employers are clearly relevant external comparators. I 14

15 agree with the Society that Bruce Power is one of the most relevant comparators because they operate a nuclear facility leased from OPG and employ similar employees with similar collective bargaining relationships. The evidence indicates that Society members at Bruce Power enjoy higher wages than those at OPG. That being said, there are a number of significant differences between OPG and Bruce Power that cannot be ignored. The most significant difference being that Bruce Power is not subject to the same OEB regulatory regime that applies to OPG. [45] OPG relies on external comparisons of engineers generally and a 2017 study conducted by Willis Towers Watson (the WTW 2017 Study). The Society countered with a review of the WTW 2017 Study conducted by Sepulveda Consulting. It is unnecessary for me to decide whether or not the WTW 2017 Study provides an accurate picture. As indicated earlier, in interest arbitration, the most relevant comparators are those that most closely mirror the situation at hand. In other words, the comparison is apples to apples and not apples to oranges. While these other external comparators are helpful in relation to the market generally and economic realities, the most relevant external comparators are those reflecting the unionized environment in the Ontario energy market. [46] The second factor addresses the need to retain, motivate and recruit qualified staff. The Society provides some evidence of a number of recruitment challenges faced by OPG. Some of these challenges may or may not be related to the PECO situation. The material submitted indicates that OPG does not face any significant retainment issues and their compensation is more than competitive and attractive in the general marketplace. [47] The third factor addresses the issue of total compensation. This issue is also related to both the internal and external relativities and the compensation received by other similarly situated employees in the sector. Also relevant is the other cost savings initiatives that are employed at OPG. In this regard, LOU #193 suspending the application of article 67 (PSA) must be considered as it will provide considerable cost savings and efficiencies, if it is continued in the renewal collective agreement. 15

16 [48] The financial soundness of OPG and their ability to pay is the last criteria relating to monetary items. As indicated earlier, OPG operates in a highly regulated environment and is facing a number of challenges that may impact their finances in the future. However, OPG is currently financially sound and there is no reason to believe that OPG cannot afford normative increases or that normative increases would adversely affect their financial soundness. [49] The normative base in my view is a 2% increase. This is supported by the rates negotiated at other Society represented employers, including NWMO (2% in 2019), Inergi (2% in 2019), ESA (2% in 2019) and Toronto Hydro (2% in 2019). I am of the view that such a normative wage increase is reasonable having regard to the article 15 criteria. I recognize that 2% is slightly more than the first year increase provided in the PWU MOA. However, the first PWU increase was for 2018 and the average annual increase in the PWU MOA is 2.2%. In this regard, my award is slightly below the average, which should not be surprising as it is a one year agreement. [50] In this round of bargaining, the Society is seeking catch up to address the internal relativity gap that they say resulted from the 2013 Albertyn Award. The Society also relies on an external relativity gap between Society members at OPG and those employed by Bruce Power. OPG disputes that there is any gap to be bridged. The 2% wage increase I have awarded does not represent any catch up nor am I awarding any additional wage increase for catch up. Catch up is not normally given in a one year collective agreement. It is more appropriate to address catch up in the context of a multi-year collective agreement. I acknowledge that Arbitrator Burkett gave catch up in his Bruce Power, supra, award relied upon by the Society. However, the situation before Arbitrator Burkett was much different from the circumstances before me. I am of view that this issue, and the parties arguments, may be addressed in the future and it is not necessary nor appropriate for me to address the issue in this award. 16

17 [51] Since 2003, the parties have negotiated a LOU similar to the current LOU #193 suspending the article 67 PSA process. In fact the provisions of article 67 have been suspended longer than they were applied, having been negotiated in It would stand to reason that the parties would renew the arrangement in some form. The suspension of art 67 provides OPG with significant operational flexibility and savings, but it comes at a price. The current LOU #193 provides some modest benefit increases, payments to the Society above certain thresholds and most significantly extension of the VRA, job security and 300 additional jobs. The additional jobs are a significant ongoing cost. I am of the view that the parties would have agreed to some additional jobs, but not as many as being sought by the Society. I believe a trade-off of some sorts would have occurred. [52] One of the Society s proposals was for travel time compensation. The Society costed the proposal as a very insignificant amount (approximately $128,180). OPG disagreed but did not provide any costing data. In my view, a trial will provide an opportunity to ascertain the true cost of this proposal. Therefore, as a trade-off for some of the jobs sought by the Society, I am adding the travel time proposal to the PSA agreement as a trial. If the cost of the travel time compensation is significantly more than the Society suggests, then the parties will have an opportunity to address the issue in the next round of bargaining. [53] In terms of OPG s request for extensions of temporary employee positions for parental leave coverage, I am of the opinion that the request is just and reasonable. It makes no sense that OPG would have to find and train a second individual to address such situations. Therefore, I am awarding an extension to temporary employee positions in such situations. [54] I also am of the opinion that the parties would have continued to suspend the escalator (COLA) clause for the duration of a one year agreement. [55] After carefully considering the parties submissions and the article 15 criteria, I am of the view that no other changes ought to be awarded for the one year renewal collective agreement. The parties will be returning to the bargaining table in very 17

18 short order and they will be able to reassess their needs at that time. Having regard to all the foregoing analysis, I hereby award as follows. AWARD [56] The parties are hereby directed to enter into a renewal collective agreement effective from January 1, 2019 to December 31, 2019, that contains all of the terms and conditions of the predecessor collective agreement save and except that it is amended to incorporate the following: All matters agreed upon by the parties prior to the date of this award. Effective January 1, 2019 a 2% salary increases across the board applicable to all salary schedules Article 24.2 Escalator (COLA) shall be suspended for the life of the collective agreement. Amend Article 34 (Temporary Employees) to provide for an extension of up to six (6) months when the use of a temporary employee is for an extended parental leave from twelve (12) months to eighteen (18) months. Effective January 1, 2019, renew the current PSA LOU# 193 and amend to provide 25 additional jobs and a trial period of one year for the improved travel time proposed by the Society. The parties may also agree to other non-contentious amendments, such as adding a definition for renewable generation and removal of references to Biomass/Gas conversion and the Lower Mattagami Project. The parties are also to renew the two side letters extending the VRA for one year and providing no involuntary surplus for the period of the LOU. [57] Unless specifically addressed in this award, all outstanding proposals are dismissed. I remain seized to deal with any errors or omissions and implementation issues until the parties have executed a renewal collective agreement. Dated at Toronto, Ontario this 30 th day of December, John Stout Mediator-Arbitrator 18