Addressing the Labour Relations Consequences of Health Care Integration

By Elizabeth McIntyre and Jo-Anne Pickel

In the past few months, much public and media attention has been paid to the provincial government’s current round of health care restructuring leading up to the proclamation of the Local Health System Integration Act (Bill 36) on March 30, 2006. Much less attention has been paid to the substantial labour relations consequences that will flow from this restructuring and how the Act addresses this impact.

Bill 36 sets out the framework for the government’s restructuring of the delivery of health services including the powers to be exercised by the Local Health Integration Networks (LHINs). The LHINs have been given the mandate to transfer or merge services, to coordinate interactions and create partnerships between health service providers. The Minister of Health is also granted extensive powers to order health service providers to amalgamate, transfer their operations to other entities, or even to crease operating or wind up their services altogether.

The extensive integration of health services contemplated by Bill 36 has the potential to be very disruptive to labour relations in the health sector in Ontario. In many cases, workers will move from one employer to another as health services are integrated either by the LHINs, the government, or through voluntary agreements between health service providers. As health services and the workers who perform those services are moved from one service provider to another, questions will arise as to the status of bargaining rights and collective agreement terms and conditions. A key concern for all parties involved in these integrations will be the determination of terms and conditions of employment for workers being transferred including seniority, wages, pension and benefit entitlements.

The 1990s round of health care restructuring which principally involved hospitals triggered difficult labour relations issues. However, the current round will raise issues of even greater complexity as services will be transferred between different types of health service providers with very dissimilar terms and conditions of employment and very different employment benefit levels. Furthermore, while most hospitals were bound by similar collective agreements with recognized hospital unions, many of the employers involved in this round of restructuring will be smaller and inexperienced with collective amendments to the Public Sector Labour Relations Transition Act (PSLRTA) and also through provisions requiring the development of human resource adjustment plans for certain integrations.

Public Sector Collective Bargaining Act (PSLRTA)

Introduced in 1997 as a transitional statute during the last round of public sector restructuring, PSLRTA established a framework for ensuring successor rights and the continuation of collective agreements following a restructuring. The statute also provides a process for resolving the first post-restructuring collective agreement. Bill 36 amends PSLRTA to make it permanent legislation that will cover sector restructuring going forward. In addition, the bill expands PSLRTA’s scope of application to cover a wider range of restructuring initiatives within the health sector, including partial integrations between health service providers. While PSLRTA does facilitate the resolution of labour issues following a restructuring initiative, that does not meant that these issues are easily resolved. Disputes under PSLRTA generally must be settled by litigation before the Ontario Labour Relations Board and this litigation can often be protracted and costly for all parties.

Human Resource Adjustment Plans

In addition to making amendments to PSLRTA, Bill 36 requires the development of human resource adjustment plans in certain circumstances. The bill requires health service providers who are ordered to integrate their services either by a LHIN or by the Minister to develop human resource adjustment plans to manage the labour relations consequences of the integration.

Human resource adjustment plans were developed in the last round of health care restructuring to minimize the negative impact on employees. These plans were negotiated between unions and hospitals and typically addressed issues such as: terms and conditions of employment including wages, employment benefits, and pensions; protocols for employee transfers; and job security measures to minimize layoffs. The plans typically also established a committee and process for monitoring the adjustment plans and for resolving disputes relating to their implementation.

The requirement in Bill 36 that parties develop human resources adjustment plans will assist in facilitating the labour relations problems that will inevitably accompany the myriad and potentially far-reaching integrations that will take place under the legislation. However, the impact of this requirement will be limited in at least two respects. First, it only applies to integrations ordered by a LHIN or by the Health Minister, and not to voluntary integrations between health service providers or other entities. Second, Bill 36 does not require that the human resource adjustment plans be negotiated with the relevant unions or representatives of non-unionized employees. As a result, the human resource adjustment planning required under Bill 36 - while helpful - is unlikely to fully resolve the significant employment-related disruptions caused by the restructuring carried out under the legislation.

Taken together, these two features of Bill 36 will provide the tools for addressing the employment-related disruptions and dislocations arising from the current round of restructuring in the health sector. While a great deal of litigation before the Ontario Labour Relations Board will be necessary to sort out the rights of various parties under PSLRTA, the development of successful negotiation of human resource adjustment plans may reduce the need for protracted and expensive litigation, as well as the attendant uncertainty for all those involved.