This case arose out of PSLRTA proceedings in which Providence, St. Joseph’s and St. Michael’s integrated into Providence St. Joseph’s and St. Michael’s healthcare. The PSLRTA process overlapped in time with central bargaining between CUPE-OCHU and the OHA. On April 22, 2018, while the PSLRTA process was still underway, CUPE-OCHU and the OHA signed the Central Issues Memorandum of Settlement (MOS), which included wage increases for CUPE members retroactive to the effective date of renewal agreement (September 28, 2017). However, on June 9, 2018, Providence and St. Joseph’s (“the Employers”) advised that they would not implement the terms of the MOS because the parties were in the process of PSLRTA, and in their view, the provisions of PSLRTA preclude the implementation of the MOS.

The Employers relied mainly on s. 15 of PSLRTA, which provides that “the collective agreement, if any, that applies with respect to employees of a predecessor employer immediately before the changeover date continues to apply with respect to those employees who are employed by the successor employer on or after the changeover date…” The Employers argued that the effect of Article 15 was to freeze the expired collective agreement as of the changeover date of August 1, 2017, with the result that the negotiated wage increases retroactive to September 28, 2017 did not apply at Providence St. Joseph’s and St. Michael’s.

CUPE argued that the Employers’ interpretation was contrary to the language and broader purposes of PSLRTA, and that having agreed to negotiate and ratify a renewal agreement, the Employers could not refuse to implement it.

In a decision dated November 27, 2018, the Ontario Labour Relations Board rejected the Employers arguments and agreed with CUPE, declaring that PSLRTA does not preclude the implementation of the MOS.

The Board agreed with CUPE that section 18(3) of PSLRTA, which provides that “no bargaining agent is under an obligation to bargain as a result of a notice to bargain given by a predecessor employer and no successor employer is under an obligation to bargain as a result of a notice to bargain given to a predecessor employer,” is a permissive provision that does not compel a successor employer to bargain, but also does not preclude the parties from voluntarily agreeing to engage in collective bargaining. Where an employer chooses to engage in central bargaining, “the PSLRTA does not entitle it to make that choice and then refuse to implement that agreement.”

The Board also preferred CUPE’s interpretation of s. 15 of PSLRTA, holding that its purpose is not to freeze particular terms and conditions of employment, but to require the successor employer to apply all predecessor’s collective agreement(s) to the employees who are now the successor’s employees by virtue of the integration. If the legislature intended to preclude any changes to collective agreement terms by negotiation or arbitral interpretation, it would say so expressly, as it has under the Labour Relations Act “freeze” provision in s. 86. The Board also agreed with CUPE that the Employer’s interpretation of s. 15 would lead to absurd consequences, noting that stalling labour relations after the changeover date could be more disruptive than permitting labour relations to continue in accordance with the LRA.

This case has significant, positive implications for the central bargaining process. It confirms that hospitals cannot use the occasion of a PSLRTA integration to halt the implementation of central language. More broadly, it affirms the importance and labour relations significance of the central process.