Prospect of arbitration looms large in Toronto firefighter negotiations
Toronto's firefighters have been without a contract since December 2014. The prospect of arbitration looms large in the negotiations.

TheStar.com
March 16, 2016
Betsy Powell

The ballooning Toronto police budget isn’t the only pressure on city finances — firefighter salaries are fanning the fiscal flames and few expect looming arbitration to provide relief.

Municipalities, including Toronto, blame arbitrators for awarding wages and benefits to emergency service workers that exceed other public sector contracts and Canada’s rate of inflation.

The process is called interest arbitration. Municipalities and unions representing employees who can’t strike turn to it when they are unable to agree to a new contract.

Emergency service worker unions say it works equitably for all, but municipalities say the system is broken and they want it fixed.

“For years, we have been calling on the province to restore balance to interest arbitration,” says Gary McNamara, president of the Association of Ontario Municipalities.

“If interest arbitration had produced the kind of wage settlements that collective bargaining achieved for other municipal employees, Ontario municipalities would have saved about $485 million between 2010 to 2014.”

Among the long list of arbitrated awards critics cite as excessive is the one, in 2013, that gave Toronto’s firefighters a 14.26 per cent raise over five years — costing the city $45.7 million.

“These people (firefighters) have grabbed the brass ring, and it’s got to stop,” former deputy mayor Doug Holyday said at the time. “They’ve got to be brought back to reality.”

But firefighter unions reject the notion that arbitrators are the key factor in pay increases.

“Most agreements in the emergency services sector are not settled through interest arbitration; they are settled voluntarily between the parties,” reads a position paper prepared for the Professional Ontario Fire Fighters Association.

It’s a chicken and egg argument.

Last year, Mayor John Tory and other members of the police services board last year negotiated a deal giving Toronto police a roughly 8.5 per cent wage increase over four years, compared to the 5 per cent raise, over four years, recently given to city inside and outside workers.

The police board’s hands were tied, Tory has said, because of the prospect of arbitration, which has “historically settled on the more generous side of wage increases.”

Fred Kaustinen, executive director of the Ontario Association of Police Services Boards, says Tory isn’t wrong, but he’s also not giving the whole story.

Arbitrators don’t “make up” their awards, “they base them on the freely negotiated settlements agreed to by other, similar police or fire employers,” he wrote in email.

Responsibility for double-inflation wage increases over the past 15 years should be placed “squarely on police employers who first settle high-wage agreements, and thereby set the trend for every other police employer across the province (and by extension, fire service settlements too.)”

What’s not in dispute is the fact that there is a long history of Toronto firefighters receiving wage parity with their police counterparts either through negotiated or arbitrated contracts. This includes the 2013 firefighter arbitration award which replicated the pay hikes negotiated by the Toronto Police Association in 2011.

Yet there’s an unusual twist this time as the city and union prepare to revisit interest arbitration next month, after talks broke down late last year. The city’s 3,100 firefighters have been without a contract since December 2014.

While the police-firefighter comparison has been linked to salaries, the city wants “to expand the comparison in order for the Toronto firefighters to take the same concessions that the police did,” said Frank Ramagnano, president of the Toronto Professional Fire Fighters Association.

Tory called the police deal “historic” because the union agreed to cancel the sick bank gratuity for new hires. Tory calculated this will result in $200 million in savings at some point in the future. (In the meantime, the a pay hike will add $65 million to the city budget by 2018.)

Last week, Tory said the city would be happy if the firefighters’ end up with a deal similar to the one negotiated with the police union, which was “probably better than what we would have go if we’d gone to arbitration.”

The most significant change doesn’t affect current employees, who can still bank up to 18 days of sick time a year and cash out upon retirement. New hires are out of luck.

Ramagnano said if the city would like to take away the sick pay “gratuity” for new employees, it should also be prepared to give the firefighters the same contractual items police get.

Firefighters, unlike police, don’t get shift differentials, premium pay for different jobs, or make extra cash doing paid duty assignments, which only police can perform. In 2011, an economist hired by the firefighter union found police were compensated on average $12,000 a year more than their fire counterparts.

Firefighters are tired of being “emergency services’ poor cousins.”

“We are the largest fire service in Canada, we’re the busiest fire service in Canada, yet we’re not the top paid,” Ramagnano said. “Of the three emergency services (police, fire, paramedics), we are, in total compensation, the least paid.”

A broken system?

The role of an arbitration panel is to resolve contract renewal disputes between employers and unions representing workers who can’t strike. Here’s closer look.

Why does it exist?

The aim is to achieve a result ensuring public sector employees do not fare better or worse than employees who have the right to strike to back their contract demands.

What is Toronto’s position on interest arbitration?

In 2013, the city wrote to the province asking it to require arbitrators to place more emphasis on the “fiscal health” of a community when making its rewards “in line with compensation increases given to other city employees.” Services might have to be reduced if salary awards are too generous, the city has warned.

Other municipalities and the Ontario Chamber of Commerce also want the process changed and blame the powerful police and firefighter unions for pressuring the provincial government to maintain the system as is.

What criteria are arbitrators supposed to consider?

Arbitrators are legally required to consider an employer’s ability to pay in light of its fiscal situation, the extent to which services may have to be reduced, in light of the decision, if current funding and taxation levels are not increased, the economic situation of Ontario and in the municipality, a comparison of firefighters and other comparable public sector employees, the employer’s ability to attract and retain qualified firefighters.

What will it take to contain spending on emergency services?

Many believe a good start would be to keep elected officials away from the negotiating table. Politicians are too vulnerable to the “politics of fear” used by fire and police unions to back demands for more money. Police union leadership has a long history of promoting the idea the service needs more money to keep Toronto’s streets safe. Being called “soft on crime” doesn’t pack the wallop it once did, but no politician wants to wear that tag.

What do police and firefighter unions say about the rising costs?

Cities need to find efficiencies and, if need be, raises taxes. During the last round of firefighter interest arbitration, the City of Toronto argued it had an inability to pay owing to budget constraints. The union argued the “inability to pay” argument is political, not economic, and whatever financial limitations the city faces are a result of voluntary political decisions, such as the decision to eliminate the $60 personal vehicle tax. “In other words, the argument is that the city has the ability to pay, it just lacks the willingness to pay,” according to blog of David J. Doorey, an associate professor of work law and industrial relations at York University.

Why has Queen’s Park ignored calls for reform?

Many cite the political influence of the firefighter and police unions, who are big supporters of interest arbitration.

“No one can compete with the track record of the Ontario Professional Fire Fighters Association in persuading the government of the day to get its way,” Star Queen’s Park columnist Martin Regg Cohn wrote last month.

What do arbitrators say?

In the 2013 decision involving Toronto’s firefighters, arbitrator Kevin Burkett wrote the employer’s ability to pay is just one factor used and suggested restricting an arbitrator’s discretion could violate charter rights.