Citing 'systemic' problems, board eliminated starting rates, boosts premiums and signal that indexing may be needed
An arbitrator has ruled that Richmond Hill Retirement Residence must overhaul its entire wage structure after finding that negotiated starting wages had slipped below Ontario's statutory minimum wage.
The decision, Richmond Hill Retirement Residence v. Service Employees' International Union Local 1 Canada, covering the period Jan. 1, 2023 to Dec. 31, 2024, decided on a 3.5% general wage increase for both years.
It also eliminated starting wages across all job classifications, introduced a night shift premium, and increased the existing weekend premium.
Starting wages in collective agreement
The core problem the board identified was structural. Ontario's Employment Standards Act, 2000 sets minimum wage at $15.50 per hour effective Oct. 1, 2022, rising to $16.55 effective Oct. 1, 2023, $17.20 effective Oct. 1, 2024, and $17.60 effective Oct. 1, 2025.
Starting rates for dishwashers and hostess/dining services attendants, though initially above the 2022 2022 threshold, fell below the minimum wage effective in 2023, because the starting wages in the collective agreement, even after the general wage increase, could not keep pace.
The board cited the arbitrator analysis in Barclay House Retirement Living v. SEIU, Local 1 Canada, 2024: "This pattern of the wage rate rising modestly above the minimum wage, then dipping below it, is not appropriate in collective bargaining relationships, let alone mature collective bargaining relationships."
The decision further observed: "This has become a systemic problem within the retirement residence industry because of the way which the minimum wage is now determined. In years gone by, the minimum wage was increased after lengthy intervals and the wages of unionized employees could rise above the minimum for the province. However, the relatively recent legislation that ensures the automatic adjustment of the minimum wage on the basis of the CPI has changed that. Now, the minimum wage is a factor every year impacting upon the rates agreed in the retirement residence industry. This is because the start rates in the collective agreements tend to be relatively close to the minimum wage."
Wages rewritten, premiums restructured
On the central wage dispute, the union had proposed a 3.5% general wage increase for each year while the employer proposed 2%. The board sided with the union, awarding 3.5% effective Jan. 1, 2023 and 3.5% effective Jan. 1, 2024, and further eliminated the starting wage step in every job classification effective Dec. 31, 2024, compressing the wage grid across all roles.
RPNs received a special wage adjustment of $3.00 per hour in two instalments of $1.50 each: the first effective Jan. 1, 2023, applied before the general wage increase, and the second effective Dec. 31, 2024. RSAs received an additional $0.25 per hour effective Dec. 31, 2024.
A new night shift premium of $0.15 per hour was introduced for all hours worked between 11:00 p.m. and 7:00 a.m., and the existing weekend premium was raised from $0.30 to $0.40 per hour. Vision care coverage was increased to $300, paramedical coverage was set at 100% to a maximum of $400 per practitioner per year, and employees with 15 or more years of service became entitled to five weeks of vacation.
Starting wages ‘flirting’ with minimum standards
The union had also sought significant structural changes and increased entitlements to sick leave. The board acknowledged this as a union priority but denied the proposal, citing its awareness of the "impact on total compensation" in light of the costs already attached to the wage grid corrections.
The board stated, "the issue of starting wages flirting with statutory minimum standards is of primary concern to the union and would have, in a freely negotiated environment, been dealt with during bargaining."
The board endorsed the reasoning of both the arbitrator in Barclay House and the arbitrator in Brookside Retirement Living (formerly Chartwell Kanata Retirement Residences) and SEIU, Local 1 Canada, and agreed with the proposed remedy in the former: "Some form of indexing seems to be the solution to the new dynamic."
