The Ontario government awarded employees of the province's largest public-sector union an additional wage increase of 1 per cent for 2012 as part of a "secret deal" that critics say undermines the integrity of the collective bargaining process and calls into question other settlements.
The government fought hard to retain the secrecy around an accord that gives 38,000 members of the Ontario Public Service Employees Union an overall increase of 3 per cent in 2012. But the deal was revealed for the first time at a labour board hearing on Wednesday. It essentially guarantees labour peace with the union until after next October's provincial election.
The generosity of the deal is in sharp contrast to the McGuinty government's pronouncements on the need to rein in spending in the public sector as it grapples with a multibillion-dollar deficit. Its flagship restraint measure consists of a voluntary two-year wage freeze for public sector workers who bargain collectively.
Against this backdrop, revelations that a sweetened deal was reached in December, 2008, for a union that often sets the benchmark has upset many employers in the sector.
The employers said the deal sets a precedent at a time when many of them face significant financial challenges. They also criticized the secrecy, especially because the government has been raising the bar on accountability by requiring hospital executives to disclose their expenses and any pay increases for non-unionized staff.
Documents entered at the hearing before the Ontario Labour Relations Board reveal the "adjustment" of 1 per cent on top of a scheduled wage increase of 2 per cent for 2012, in exchange for non-wage concessions.
The documents were presented after Diane Gee, chairwoman of the hearing, rejected the government's request to permanently seal correspondence outlining the "adjustment," which was over and above a four-year collective agreement OPSEU and the government reached in December, 2008.
"It doesn't help anybody when there has been a secret arrangement that has to come out in this way," Alok Mukherjee, chairman of the Toronto Police Services Board, said in an interview.
David Musyj, chief executive officer of Windsor Regional Hospital, wondered whether other settlements negotiated by the government also contain "side deals." He said the deal makes it difficult for him to continue preaching restraint at his hospital, where non-unionized workers' pay has been frozen for five years.
"It's hard for me as the CEO of an organization of 3,000 people to stand up in front of them and justify that this should continue when stuff like this is happening," he told The Globe.
OPSEU president Warren (Smokey) Thomas said in an interview that he had no "moral or legal obligation" to report the top-up deal to the public.
The deal with OPSEU is spelled out in letters from an official in the Ministry of Government Services to the union. In a letter dated Dec. 23, 2008, the official says the 1-per-cent increase will not be part of the collective agreement.
The matter came to light because the union that represents 12,000 professional and supervisory public servants filed a complaint filed with the labour board, accusing the government of bargaining in bad faith. The Association of Management, Administrative and Professional Crown Employees of Ontario said it relied on the portion of the OPSEU agreement that was public in negotiating its own wage deal in early 2009. The union said in documents that it heard about the deal from "informed sources" in September, 2009.
Government lawyers argued at the hearing that there would be "significant detrimental impact" on labour relations if confidential agreements were disclosed. Ms. Gee disagreed, and asserted that open proceedings are a cornerstone of Canada's justice system.
A government official told The Globe that keeping the top-up pay confidential saved taxpayers money because other unions ended up settling for less.
"By bargaining hard, the government protected taxpayers," said Geetika Bhardwaj, a spokeswoman for Government Services Minister Harinder Takhar. "That has one union upset because they wanted more from taxpayers and didn't get it. We make no apologies for that."
John O'Toole, the Progressive Conservatives' government services critic, accused Premier Dalton McGuinty of not being "straight" with Ontarians.
"Really, what he's doing is giving [OPSEU]a post-dated cheque until after the election and trying to cover it up," he said in an interview.
With a report from James Bradshaw