Bill 124, the “Protecting a Sustainable Public Sector for Future Generations Act, 2019” (the Act) was introduced by the Ontario government on June 5, 2019 and achieved Royal Assent on November 7, 2019. The Act was created to implement moderation measures in respect of compensation in Ontario’s public sector. The Act amended the Employment Standards Act, 2000 and the Labour Relations Act, 1995 to curb compensation increases over a three (3) year period.

The Act provides for a three (3) year window of salary moderation (a “moderation period”) and compensation restraint. During this three (3) year period, the Act limits salary rate increases to no more than 1% for each 12-month period, for each position or class of positions.

This limitation does not apply to salary or wage increases that are related to:

• length of employment (i.e. movement through a pre-existing wage grid)
• the assessment of performance, or
• the successful completion of a course of professional or technical education (provided that the increases are authorized by either a collective agreement or an existing compensation plan)

As a result of the Act, any increases to compensation within the defined moderation period must be consistent with the above criteria. This means that many discretionary payments such as selective salary increase or salary adjustments on contract renewal, cannot exceed 1% unless they can be directly linked to one or more of above exceptions.

Hiring managers and supervisors are encouraged to work closely with Human Resources [1] or Faculty and Academic Staff Relations [2] to ensure that any compensation increases during the moderation period are compliant with the Act.

As most of the University’s employee agreements have or will expire over the coming months, the defined moderation periods applicable to each group of employees at the University of Guelph is defined below.