Bill 74, The People's Health Care Act, 2019, has completed second reading in the Ontario legislature, and was referred to the Standing Committee on Social Policy. Once passed, Bill 74 will create the Connecting Care Act, 2019 (the "Act").
As has been discussed in our previous bulletins issued on Bill 74, the Act will authorize the Minister of Health and Long-Term Care (the "Minister") to designate a person or entity, or persons or entities, that provide three or more of the prescribed health services as integrated care delivery systems ("ICDS"). The Act also:
- permits the Minister to make orders transferring all or some of the employees of prescribed organizations, including agencies of the Ministry of Health and Long-Term Care, to an agency known as Ontario Health (the "Agency"), a health service provider ("HSP") or an ICDS ("Transfer Orders");
- expressly contemplates three types of integrations: integrations facilitated by the Agency ("Facilitated Integrations"), integrations required by Ministerial order ("Required Integrations"), and integrations initiated by HSPs or ICDS. Facilitated Integrations and Required Integrations can expressly be initiated with respect to HSPs and/or ICDSs; there is no express power provided to initiate Facilitated Integrations or order Required Integrations to the Agency itself.
Transfer Orders and the three types of integrations provided for under the Act are all subject to express rules pertaining to labour and employment matters.
Given the high rate of unionization in the health care sector, these employment rules, and in particular the labour relations rules, will of be particular importance to clients operating in that sector who may be involved in a Required Integration, a Facilitated Integration or otherwise subject to a Transfer Order.
Transfer Orders and the Transfer of Employees under Section 40
As indicated above, the Act contemplates that the Minister may issue Transfer Orders requiring the following organizations to transfer, among other things, their employees to the Agency, a HSP or an ICDS:
As set out in Fasken's bulletin, Ontario's Proposed Super-Agency: The Creation of Ontario Health Under Bill 74 the Act contemplates this transfer of employees under Section 40 being on the initiative of the Minister (or her designate).
As might be expected, the current draft of the Act contemplates the continuity of those subject to a Transfer Order.
The Transfer Order must specify the date on which the transfer takes effect, and is deemed not to constitute a breach, termination, repudiation or frustration of any agreement including a contract of employment or collective agreement. Employees become the employees of the transfer recipient (the new employer) as of the date of the transfer, and their employment is deemed to be continuous under provincial employment standards law. The Act specifically states that the transferred employees are not terminated, severed or constructively dismissed because of the transfer and all terms of employment bind the transfer recipient (the new employer) immediately after the transfer.
The Minister also has the authority to dissolve an agency under the Act. Where the Minister uses this authority, it is unclear what the impact would be on any employees not transferred prior to the dissolution.
Integrations under the Act and Labour Relations
Integrations are dealt with separately from Transfer Orders, in a separate part of the Act. It would appear that an entity subject to the Act may experience a:
- Transfer Order and an Facilitated Integration;
- Transfer Order and a Required Integration;
- Transfer Order with no integration initiated by the Minister or the Agency; or
- Facilitated Integration or a Required Integration without a Transfer Order.
The Act expressly sets out the labour relations rules which will apply in the event of a Facilitated Integration, a Required Integration, or an integration initiated by an HSP or ICDS. Generally, these rules are to be found in the Public Sector Labour Relations Transition Act ("PSLRTA").
Background on PSLRTA
As background, PSLRTA sets out the regime under which bargaining units and collective agreements are revised when there is restructuring in certain public sector organizations, including many in the health care sector. PSLRTA applies in these situations instead of the normal successor rights provisions under the Labour Relations Act, 1995.
When PSLRTA was introduced in 1997, its application in the health care sector was limited. PSLRTA's scope has expanded through amendments over the last two decades. These amendments extended PSLRTA's application to licensed long-term care homes, health service providers within the meaning of the Local Health System Integration Act, 2006 ("LHSIA") (which include, for example, hospitals and operators of community health centres), and other entities that provide services within the health care sector.
The stated purpose of PSLRTA is to ensure quality and effective public services through the encouragement of certain best practices, to facilitate the establishment of rationalized bargaining unit structures and to facilitate prompt dispute resolution of workplace disputes that may arise from mergers, amalgamations or other restructuring activities. Moreover, as the Ontario Labour Relations Board has noted, PSLRTA's origin and evolution through the years is understood within the context of "government directed restructuring."
Application of PSLRTA under to Integrations under the Act
A clear aim of the Act is to further facilitate the integration of health care services. Under Bill 74, HSPs and ICDSs must identify opportunities to integrate the services of the health system (section 30), and HSPs and ICDSs may integrate their services with other persons or entities at their own initiative, subject to certain provisions within Bill 74 (section 35). When an integration is initiated by a HSP or an ICDS that is funded in whole or in part by the Ministry, there is a requirement that advance notice must be given to the Minister. That notice must contain, in part, an analysis of human resources implications. The Ministerial authority in the Act would effectively allow the Minister to veto the integration initiated by HSPs and ICDSs.
Section 35(2) of Bill 74 explicitly states that PSLRTA continues to apply to an integration initiated by a HSP or ICDS in accordance with the terms of that Act. Under the terms of PSLRTA, that Act applies to integrations where all employers involved are HSPs or an employer whose primary function is or will be the provision of services within or to the health services sector. (This definition also includes employers who were local health integration networks, but of course those networks are being transitioned to other entities under Bill 74, and so reference to local health integration networks will be removed from PSLRTA by Bill 74). Succinctly, it appears that where HSPs or ICDSs determine, on their own initiative, to merge or transfer services, and presumably where such an integration falls under the definition of a "health service integration" under PSLRTA, PSLRTA continues to apply as it had before.
The Act also addresses the applicability of PSLRTA where an integration is the result of a Facilitated Integration or a Required Integration, starting at section 38. For instance, section 38(1) of the Act states that PSLRTA applies when an integration, under a facilitation decision by the Agency or an order of the Minister, occurs that is:
- (a) the transfer of all or part of a service of a person or entity;
- (b) the transfer of all or substantially all of the operations of a HSP or ICDS; or
- (c) an amalgamation of two or more persons or entities.
The Act also sets out when PSLRTA will not apply to Facilitated Integrations and Required Integrations. Most of PSLRTA will not apply if, after the integration, the successor employer would not be a HSP or an ICDS, or in circumstances where the successor employer's primary function is not the provision of services within or to the health service sector. PSLRTA would similarly not apply if there is agreement to this affect by the successor employer and all bargaining agents impacted by the integration (though in the event of such an agreement, some PSLRTA provisions continue to apply to specific actors, such as municipalities, district school boards, and hospital operators).
Even without agreement of all parties, a successor employer or bargaining agent impacted by a Facilitated Integration or a Required Integration is provided an opportunity under the Act to apply to the Ontario Labour Relations Board (the "Board") for an order deeming PSLRTA not to apply to the integration in question. In determining whether PSLRTA should apply or not, the Board is to use those factors that apply under PSLRTA to the exercise of the Board's discretion regarding this question. A decision in such applications is to be made by the chair of the Board or a single vice-chair.
The past jurisprudence of the Board has tended to err on the side of applying PSLRTA in the context of an integration involving health services. One may assume, therefore, that in many cases involving a Facilitated Integration or a Required Integration, an attempt to make PSLRTA inapplicable will not normally succeed. Where the Board does determine that PSLRTA is inapplicable, some rules specific to certain actors, such as municipalities, district school boards, and hospital operators, survive.
In the event of an integration where PSLRTA is not applicable, presumably the rules of the Labour Relations Act, 1995 with respect to successor rights applications and common employer applications would still apply where appropriate.
Potential Gaps in Labour Relations Coverage
In the event a Transfer Order is made in the absence of a Required Integration, a Facilitated Integration, or an integration initiated by an HSP or ICDS, which results in a dispute over labour relations (such as bargaining unit structures, bargaining agents or collective agreements), the Act is silent as to which labour relations rules would apply. Presumably, the provisions of the Labour Relations Act, 1995 or PSLRTA would govern where and as appropriate in the case of such a dispute.
The same can likely be said in the event of a dispute arising out of a Transfer Order to the Agency itself. There are no express rules in the Act dictating what labour relations rules apply in the event of a Transfer Order transfers employees to the Agency. Arguably, the Labour Relations Act, 1995 or PSLRTA would govern where and as appropriate in the case of a dispute, with one exception: the Act makes it clear that section 1(4) of the Labour Relations Act, 1995 (the common employer provision) does not apply to the Agency.
 Refer to our bulletin dated March 21, 2019 for a list of the prescribed services and other details regarding ICDS.
 Refer to our bulletin dated March 21, 2019 for further information regarding HSPs.
 Ontario Nurses' Association v. Central Care Corporation 2007 CanLII32659 at para. 61.
 As stated in Ontario Public Service Employees Union v North Bay Regional Health Centre, 2017 CanLII 16969 at para. 30, "the Board has said that where there is a health services integration under the PSLRTA, it will usually exercise its discretion to apply the PSLRTA". More specifically, "[i]n the absence of some significant set of adverse consequences that might flow from the application of the PSLRTA, the Board should in the normal course, exercise its discretion to declare the PSLRTA to apply to the types of health services integration contemplated by the LHSIA." (emphasis added, para. 70, Ontario Nurses' Association v. Central Care Corporation, 2007 CanLII32659).