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HomeMy WebLinkAboutCOD-018-11 Clariugtoil REPORT CORPORATE SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Date: JUN 13, 2011 Resolution#: 4P'Q441354// By-law#: N/A Report#: COD-018-11 File#: Subject: BILL 181 FIRE MANDATORY RETIREMENT LEGISLATION AND PROPOSED AMENDMENTS BY OMERS SPONSORS CORPORATION RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report COD-018-11 be received for information. Submitted by: r.IL Am Reviewed by: t"S-CC. 1 arse Marano, Franklin Wu, H.B.Sc., AMCT, Director of Corporate Chief Administrative Officer Services/Human Resources MM/Iw/gj CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T 905-623-3379 REPORT NO.: COD-018-11 PAGE 2 1.0 Background 1.1 At the Council meeting of May 2, 2011 staff was directed to prepare a report on Bill 181 -Fire Mandatory Retirement Legislation and how this legislation may impact the Municipality of Clarington. The information provided in this report has been gathered from several sources, including legal updates provided by Hicks Morley and Heenan Blaikie, Ontario Municipal Human Resources Association (OMHRA), Ontario Municipal Employees Retirement System COMERS), and the Association of Municipalities of Ontario (AMO). 1.2 Also included is information on recent proposed changes submitted to the OMERS Sponsors Corporation that if approved may affect the Municipality of Clarington and its employees. 2.0 Bill 181 - An Act to amend the Fire Protection and Prevention Act, 1997 2.1 On April 18, 2011, the Honorable Charles Sousa, Ontario's Minister of Labour, introduced Bill 181, the Fire Protection and Prevention Amendment Act, 2011. On June 1, 2011 Bill 181 received Royal Assent and the Fire Protection and Prevention Act, 1997 was amended in two significant areas. First, it creates a framework for addressing the issue of mandatory retirement for firefighters who regularly perform fire suppression duties. Second, firefighters will be protected by new duty of fair representation language requiring their Association to represent them in a manner that is not arbitrary, discriminatory or in bad faith. 3.0 Mandatory Retirement Amendment 3.1 The mandatory retirement amendment provides that a collective agreement may include a provision requiring firefighters, who are regularly assigned to fire suppression duties, to retire at a specified age of 60 or over. This will only include firefighters who are unionized under the Act and will exclude all volunteer firefighters, whether non-union or union under the Ontario Labour Relations Act. 3.2 The proposed legislation does not clearly identify the positions that are included as "regularly assigned to fire suppression duties", but it is likely to exclude those firefighters in the communications divisions, prevention divisions, mechanical divisions and secretarial positions, but would include training divisions, and Platoon Chiefs and District Chiefs. By enacting this legislative requirement the Provincial government is acknowledging the evidence of health and safety risks to firefighters over the age of 60. REPORT NO.: COD-018-11 PAGE 3 3.3 Currently, the Municipality of Clarington and the Clarington Fire Fighters Association, Local 3139, International Association of Fire Fighters have a Memorandum of Understanding, effective October 16t", 1995, that identifies the duly negotiated Article 17.04 (a) which states; "The normal retirement age for Fire Fighters shall be sixty (60) years of age but nothing herein shall prevent an employee from retiring at an earlier age in accordance with the provisions of the Ontario Municipal Employees Retirement Systems Act. 3.4 The legislation also stipulates that "An employer shall not require a firefighter to retire if the employer can accommodate the firefighter without undue hardship, considering the cost, outside sources of funding, if any, and health and safety requirements, if any." 4.0 Human Rights Implications of Mandatory Retirement 4.1 A recent Human Rights Tribunal decision acknowledged that mandating retirement at age 60 for firefighters is a bone fide occupational requirement as the risks of cardiac events for firefighters are significant and increase with age; in particular after age 60 and the risk of an on-the-job cardiac event during emergency response is particularly high. 4.2 Bill 181 states that an employer shall not require a firefighter to retire if the employer can accommodate the firefighter without undue hardship, considering the cost, outside sources of funding, if any, and health and safety requirements, if any. As there are few light duty positions within the fire services, accommodations of this nature may prove challenging and costly for employers. The implications of this section are under review by the Municipal sector and will be monitored over time. 5.0 Duty of Fair Representation 5.1 The second amendment in Bill 181 provides that a Fire Association shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the firefighters in the bargaining unit, whether or not they are members of the Association. 5.2 If a member of the Association feels they have been aggrieved in violation of the duty of fair representation, an application can be made directly to the Ontario Labour Relations Board (the "Board"). A Labour Relations Officer (the "Officer") would then be appointed to inquire into the alleged contravention of the duty of REPORT NO.: COD-018-11 PAGE 4 fair representation by the Association. The Officer or the Board would have the ability to determine what, if anything, the Association, the employer or any person should be required to do or refrain from doing with respect to the contravention, despite the provisions of the collective agreement. 6.0 Ontario Municipal Employee Retirement Plan COMERS) 6.1 On May 4, 2011 the OMERS Sponsors Corporation made public proposed changes to the OMERS pension plans. The two changes that would directly impact the Municipality of Clarington and its employees are the reduction in Supplemental Plan contribution rates and an adjustment to the blending of contribution rates between NRA 60 and NRA 65 benefits 6.2 Reduced Contribution Rates for Supplemental Plan Benefits The Supplemental Plan was introduced by OMERS in July 1, 2008 and it provides that police, firefighters and paramedics are able to bargain additional OMERS pension benefits, thereby increasing their pension payment upon retirement. Each negotiated benefit has an additional contribution rate for the employee and employer. To date, there are no participants in the Supplemental Plan. If approved, a reduction in contribution rates for the Supplemental plan may increase the demand for this benefit at negotiations, ultimately increasing the costs for employers. 6.3 Blending of contribution rates between NRA 60 and NRA 65 The proposed plan change to the current provision is for the blended contribution rate between NRA 60 and NRA 65, in 2012, and beyond shall be based on the difference in cost due strictly to the difference in benefits between NRA 60 and NRA 65. While not explicitly stated the intent to this proposal is to have the NRA 60 contribution rates lowered. In order for contributions to the OMERS Primary Plan to continue to be sufficient this would likely require that NRA 65 contribution rates be increased. Essentially this implies that there may be an attempt to subsidize the Emergency sector special benefit provisions; by the balance of the regular OMERS group. 7.0 Summary 7.1 Bill 181, An Act to amend the Fire Protection and Prevention Act, 1997 implemented two changes. As the collective agreement between the Municipality REPORT NO.: COD-018-11 PAGE 5 of Clarington and the Clarington Fire Fighters Association, local 3139 provide for retirement at age 60 the introduction of this mandatory clause into collective agreements will have little impact on the Corporation. However, the legislation specifically does not cover volunteer firefighters who are required to perform the same functions as a firefighter under the same circumstances. If the purpose of the legislation is to identify the health and safety risks for firefighters assigned a role in suppression duties, it is uncertain why the Provincial government would not apply the same standard to a volunteer firefighter who would be exposed to similar risks. However, the Municipality of Clarington has addressed this issue in Report COD-35-08 and applies the same mandatory age 60 requirement to volunteer firefighters as is outlined in the current proposed legislation. 7.2 It is unclear at this time what the impact will be on employers if the Board finds that an Association has failed to comply with its duty to fairly represent a firefighter. 7.3 The proposed changes to OMERS are intended to reduce the contribution rate applied to NRA 60 plans, specifically police and fire sectors, and Supplemental plans, available to police, fire and paramedic sectors. In order for OMERS to maintain adequate funding levels contribution rates have increased in six of the last nine years and OMERS has projected an increase each year through to 2013. Considering past and planned future contribution rate increases it would seem that in order for a reduction in contribution rates for the NRA 60 Plan and Supplemental Plans that the NRA 65 Plan contribution rates would have to increase to provide adequate funding to the overall plan; essentially requiring NRA 65 participants and employers fund a retirement benefit that all the plan members are not eligible to participate in. 7.4 The Sponsorship Committee for OMERS is expected to be voting on proposed changes on May 26 and June 28 2011. To date, the above proposed changes have not been voted on.