Bill 124 Update: New Rules under Ontario’s Public Sector Compensation Restraint Legislation

On November 5, 2020, the Ontario government tabled its 2020 Budget, Ontario’s Action Plan: Protect, Support, Recover (the “Budget”) and introduced accompanying legislation (Bill 229, Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020 (“Bill 229”)) designed to implement and address certain Covid-19 specific issues related to the Budget.  Buried within Bill 129 are some important changes to Bill 124,  the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (“Bill 124”) wage restraint legislation applicable to public sector and broader public sector employers in Ontario who receive funding from the government of Ontario of at least $1million per year.

Specifically, Bill 229 includes the following changes to Bill 124:

  1. The proposed changes to Bill 124 provide rules for how and when a moderation period will apply to an employer who is newly certified by a union after June 5, 2019 and where previously unionized employer is decertified.  In short, where employee’s have already commenced their moderation period before the change in status they will get credit for the time spent in their moderation period.  If they have not commenced their moderation period before the change in status then the 3-year moderation period will apply under their new status.
  2. Bill 229 would amend the legislation to permit the government to withhold funds from the employer or employers’ organization if a directive is not complied with, and contains measures that might result in the forfeiture of the withheld funds.

In short, Bill 229 signals that the government does not intend to allow employers or unions to escape the impact of Bill 124, even during the pandemic and its intentions to strictly enforce the requirements for limiting increases in salary and total compensation to 1% each year during the applicable moderation period for government funded agencies.

PooranLaw will continue to monitor legal developments related to Bill 124.   In the meantime, if you require legal assistance, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.

Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation.