Interest Arbitration - NL

Interest Arbitration in Canada

No. 2, Spring 2025

This newsletter, Interest Arbitration in Canada, serves as an essential companion to COLE LABOUR's collective bargaining newsletters, specifically written for sectors such as police, firefighter, paramedic, and health care. Its primary objective is to identify the appropriate strategic considerations for negotiators in these sectors. Just as a negotiator in the strike/lockout sectors understands the unique dynamics of impasse in support of a more favourable outcome, arbitration sector negotiators should be aware of its processes and practices and how they can be shaped to support your objectives.

The newsletter will draw on COLE LABOUR’s extensive interest arbitration decision archive, frequently highlighting some of the early decisions which serve as the foundations for arbitration core principles. The principles considered in these decisions can be applied across different sectors. In an earlier newsletter we talked about replication, one of the key considerations in arbitral decision making. In this edition we will consider a second important consideration: comparability.

Comparability: The First Principle

If replication is the arbitrator’s goal in achieving a proper outcome, the natural follow-up question is “replicate what?” In considering this question arbitrators make a series of decisions. Firstly, which are the most appropriate comparators given the issues that are in dispute? Second the arbitrator must consider the outcomes of negotiations (or arbitrations) within the comparator group to understand the “market” for the work performed.

Determining the appropriate comparators can rely on several factors, the strongest being whether the parties themselves have defined certain comparators in resolving their previous collective bargaining interests. While these are the most helpful for determining suitable outcomes in arbitration, comparables can be subject to change, albeit either slowly over time, or as a result of some form of structural change. I will return to this below.

Comparators can bring an important predictability to the bargaining relationship, which benefits both the union members and employers. In a 1983 British Columbia health care case, Arbitrator Munroe made the following observation:

One of the advantages of the standard of comparability with the public service is that it is durable and predictable. That is to the benefit of everyone. On the one hand, it puts employees' expectations on a reasonably even keel. On the other hand, it permits the hospitals to engage in long term budgeting with some degree of confidence.[1]

The mechanisms of determining suitable comparators often (although not exclusively) takes into account factors like workplace characteristics and population. In another 1983 health care decision, this time from Alberta, Arbitrator Hawco observed:

Interest arbitration boards have always given consideration to the comparability factor - what other employees doing the same or relatively the same jobs are receiving by way of benefits when employed by similar employers in similar communities. Indeed, it may be said that this factor is generally considered to be the primary factor governing arbitration boards.[2]

Likewise, Arbitrator Goodfellow made the following observation in a 2013 Ontario police sector case:

…the fundamental goal of interest arbitration is “replication”; that is, to produce the kind of outcome that the parties would themselves have achieved has they been able to conclude an agreement on their own. As a practical matter, especially where clear patterns have already been established, that typically involves an exercise in “comparability” – of finding, and applying, the best possible comparators for the particular workplace and the particular workers. Generally speaking, again, that involves comparing nurses to nurses, support workers to support workers, teachers to teachers, firefighters to firefighters, police to police, and so on.[3]

Arbitrator Goodfellow observed the decision making process is principally focused by occupation: police to police, firefighters to firefighters and so on. There can be, in certain circumstances, narrow exceptions to this, as is the case where a historic relationship exists between police and firefighters in the same community. This reflects collective bargaining history and originates, most often, in the parties’ adoption of parity relationships between first responders in the same community. As an interesting sidenote – in Ontario, the police-fire parity relationship dates back to a Commission Report to the Toronto Board of Control in the early 1920’s. Arbitrator Burkett made the following observation in a 1999 Hamilton fire fighter interest arbitration:

There exists a long-standing acceptance of a direct relationship between police and fire salaries within any given community dating back almost 50 years. The evidence here, is that since 1987 there has been a parity relationship between the City of Hamilton fire fighters and the Hamilton-Wentworth police officers. From 1987 to 1996 inclusive, the differential between the annual salary paid to a first class fire fighter and that paid to a first class constable has never been more than $3.00. Absent a compelling justification for deviating from this long-standing parity relationship, we are not prepared to do so.[4]

Just as there can be variations to occupational considerations, like police-fire, there can also be variations to the weight given to factors like workplace or community demographics. For example, across the Province of British Columbia the determination of police or firefighter wage rates (among other things) is largely dominated by provincial patterns, and less so on workplace or municipal demographics.[5]

Comparator Content

The content of comparator negotiation outcomes is critical in the analysis of appropriate awards. After the arbitrator resolves the question about comparator suitability, the next question is “What did they do in their negotiations?” This provides the arbitrator with the “objective data” that illustrates both the negotiation outcome for workers, and the market realities for the employer. Arbitrator Stout made the following comment in a long-term care decision:

An interest arbitrator or interest arbitration board attempts to replicate the result that would most likely have occurred had the parties been able to freely bargain their collective agreement. Relevant to the application of replication is objective evidence of the comparators, hopefully freely negotiated or imposed by interest arbitration. As stated by Arbitrator Goodfellow in Bridgeport Health and CUPE 79, 2011 CanLII (ON LA), "comparability puts the flesh on the bones of replication, providing the surest guide to what the parties would likely have done, in all the circumstances, had the collective agreement been fully and freely bargained." In addition, comparability provides objective data of what the market can bear and what similarly situated employees are receiving as compensation (the equitable principle of equal pay for work of equal value).[6]

Finally, despite their long term application, comparators can change from time to time. Following a series of municipal amalgamations across Ontario twenty years ago a firefighters association argued that its historic comparators were no longer relevant and that the new, larger municipality warranted a fresh look at comparators. Arbitrator Kevin Burkett agreed, and a new group of firefighter comparators was applied, increasing wage rates.[7]

Summary

Along with replication, comparability is one of the first principles for interest arbitrators in determining appropriate outcomes. Negotiators in the first responder communities, as well as others who rely on interest arbitration to resolve bargaining disputes, benefit from an awareness of the particular application of these principles. How they influence negotiation strategies is key. A negotiator should understand the arbitration process to best position their strategies knowing how an arbitrator will make decisions.

In future editions of Interest Arbitration in Canada, we will go deeper into decision making and arbitration strategies.

[1] Re: Health Labour Relations Association, (unreported) Munroe, January 20, 1983.

[2] Alberta Mental Health Hospital Board (unreported) December 22, 1983, (Hawco).

[3] Ottawa Police Association and Ottawa Police Services Board, (unreported) April 5, 2013 (Goodfellow).

[4] Hamilton Professional Fire Fighters Association and the City of Hamilton (unreported) December 14, 1999. (Burkett) p. 5.

[5] Re: Okanagan Mainline Municipal Labour Relations Association (City of Kelowna, City of Penticton & City of Revelstoke) and IAFF Locals 953, 1399 & 1746, 1989 CanLII 9325 (BC LA).

[6] Central Place Milbrook Inc. COB Centennial Place Long Term Care and CUPE Local. 4751-00. (2022, CanLII, 10) (ON LA) Stout

[7] Re: Kingston Professional Fire Fighters Association and the Corporation of the City of Kingston, (unreported) November 23, 2011, Burkett.

To view my other newsletters follow these links: Collective Bargaining in Canada can be found here. And my work on Union Member and Engagement can be found here. I hope you find them informative - contact me if you would like to be added to our growing distribution list. For more information about COLE LABOUR, you can visit the mainpage here.

Bill Cole created COLE LABOUR in early 2023 to focus on collective bargaining, interest arbitration, negotiation training and organizational development for labour unions, with a particular focus on first responders and health care. Bill has extensive experience representing unions in collective bargaining in the police, firefighter, health care, airline pilot, hotel workers, steelworkers, broader public and private sectors. He has wide-ranging experience in mediation and interest arbitration in multiple sectors and jurisdictions across Canada. Bill has developed and delivered introductory, intermediate, and advanced negotiation training to thousands of union representatives across North America. He is the co-author of The Art of Collective Bargaining available at Thomson Reuters. You can see that publication here.

Bill Cole is a Senior Research Associate at Harvard's Center for Labor and a Just Economy, and a faculty member of Harvard's Trade Union Program where he teaches organizational development.

Subscribe to our Newsletters.

If you think others would find this newsletter interesting, please feel free forward it to them. I offer the following newsletters:

Collective Bargaining in Canada
Police Collective Bargaining in Canada
Firefighter Collective Bargaining in Canada
Paramedic Collective Bargaining in Canada
Health Care Collective Bargaining in Canada
Union Member Engagement & Participation
Interest Arbitration in Canada

All our newsletters will be delivered in digital format, by email. If you would like to subscribe please confirm which newsletter you are interested in at info@colelabour.ca