Background

The Public Pay Reduction Act imposed a wage rollback for all public sector employees as a deficit reduction measure.

Complainants' Allegation

The Act violates freedom of association principles and alters the structure of labour relations in PEI by:

ß       breaking all collective agreements the province had reached with various unions

ß       eliminating collective bargaining and resort to binding arbitration on compensation issues

ß       distorting the balance of power between employer and employees

ß       setting a dangerous example for private sector employers to treat workers' rights as inconsequential

ß       setting a trend of imposed solutions rather than negotiated outcomes to address government's fiscal pressures

ß       being enacted without prior consultation with unions or employees

The CFA should consider sending a fact-finding investigative mission.

Government's Reply

Economic pressures justified the Act and the measures taken comply with the ILO standards for exceptional measures to address an economic crisis.

CFA Conclusions

It is not for the CFA to comment on the soundness of economic policy to justify the legislation.  The CFA is to determine whether the measures taken by the Government go beyond the acceptable limits that may be placed on collective bargaining.

The CFA is concerned that the Act does not provide adequate safeguards in relation to workers' standard of living. 

The Act violates the principles of freedom of association because it cancels the terms of already negotiated collective agreements.  Such contracts should be respected.

While there was some general consultation, very little was focused on employees and union groups.  Full consultation with stakeholders is critical.

CFA Recommendations

1.     The Government is urged to refrain from interrupting previously negotiated contracts.  Such agreements should be respected.

2.     Keep the CFA informed of the developments in public sector labour relations in PEI.  Hopefully, the situation will soon return to normal such that free collective bargaining is restored.