Canadian Union of Public Employees, Local 1582 v. The Municipality of Metropolitan Toronto and Metropolitan Toronto Library Board, 1989 CanLII 1461

0009-89 CanadianUnionofPublic Employees,Local1582Applicant v. The MunicipalityofMetropolitan Toronto and Metropolitan Toronto Library Board, Respondents

Before : Beth Symes, Chair; Donald Dudar and Geri Sheedy, Members

Appearances:Laura Trachuk, Steven Burdick and Lee Ramsay for the Applicant; Darrell Smith, Dianne Younge and Harold Ballforthe Respondent Municipalityof Metropolitan Toronto; John Sanderson, J.R. LeForte, and Linda Jenkins for the Respondent Metropolitan Toronto Library Board

Cite As: Metropolitan Toronto Library Board (1990), 1 P.E.R. 112

Employer

The issue before the Tribunal was whetherthe LibraryBoardorthe Municipality was the employer of the staffattheMetropolitanTorontoLibrary. As "employer" is not defined by the Act, the test developed by the Tribunalmustbeconsistent withthe purpose ofthe Act and fit within its context. Applying Haldimand-Norfolk (No.3) the Tribunal concludes that, for pay equity purposes, the Municipalityistheemployerof the libraryworkers. The Municipality cannot be characterized simply as the paymaster or source of funds fortheLibrary. Instead, it exercises substantialcontrolovertheLibraryBoard'sbudget. Second, it most heavilyinfluencescompensationpractices. Third, the Library is integral to the Municipality. Public library services are a core activity of the Municipality which it is required by statute to fund.

Employeur

La question dont était saisi le Tribunal était la suivante: lequel du Conseil des bibliothèques de la communauté urbaine de Toronto ou de la municipalité de la communauté urbaine de Toronto est 1' employeurdupersonnelde la bibliothèque de la communautéurbainedeToronto. Étant donné que la Loi ne définit pas le terme «employeur», le testélaborépar leTribunaldoit être compatible avec 1'objet de la Loi et s'inscrire dans ce contexte. Les critères élaborés dans Haldimand-Norfolk (No.3) peuvent etre utilisés dans la présente cause. Le Tribunal conclut que la communauté est, aux fins de l'équité salariale, l'employeur des employés de la bibliothèque. La communauté n’est pas simplement le payeur ni la source de fonds de la bibliothèque. En fait, la communauté exerce un contrôle considérable sur le budget du Conseildebibliothèques. Par conséquent, la communauté assume l'ensemble de la responsabilité financière du Conseil de bibliothèques. Deuxièmement, la communauté exerce une influence profonde sur les pratiques en matière de rétribution et assume donc la responsabilité de ce domaine. Finalement, la bibliothèque fait partie intégrante de la communauté et ne peut être dissociée de la municipalité. La prestation de services de bibliothèque publique fait partie des activités essentielles d’une municipalité. La communauté est tenue, en vertu de la loi, de financer le conseil étant donné qu'il s'agit d'un service qu'elle doit fournir.

DECISION OF THE TRIBUNAL, DECEMBER 5, 1989

THE ISSUE

1. The Applicant requested a hearing before the Tribunal with respect to an Order of a Review Officer

dated June 8, 1989 requiring the Applicant union to negotiate a pay equity plan with the Metropolitan Toronto Library Board who was found by the Officer to be the employerofthe staff of the Metropolitan Toronto Reference Library.

2 It is the Applicant's position that the Order is wrong; that for pay equity purposes, the employer of the staff at the Metropolitan Toronto Reference Library is the Municipality of Metropolitan Toronto; and that the Library staff must be included in the establishment of the Municipality. It is the position of the Respondent, the Municipality of Metropolitan Toronto, and of the Metropolitan Toronto Library Board thatthe Orderiscorrect; thatthe employerofthis staffisthe MetropolitanTorontoLibraryBoard;and that the staff of the Library are in a separate establishment from the employees of Metro.

3 The issue is important for the parties, as the definition of establishment determines which positions are availableaspotentialcomparatorsforthefemalejobclassesintheLibrary. The Applicant alleges that there may be no male comparators at the Library for the female job class of librarian. The Library Board's positionisthat although there is no agreement as to whether there aremale comparatorsforthe librarians, they should continue to negotiate this issue and if they are unable to agree, the dispute as to comparators should be referred to the Pay Equity Commission for resolution.

BACKGROUND

1The Canadian Union of Public Employees, Local 1582 (the “Union”), is the bargaining agent for all full-time and part-time staff at the Library, save and except those employed in managerial positions.

2The Municipality of Metropolitan Toronto Act, R.S.O. 1980 c.314 as amended, sets out the structure and responsibilities of the Corporation of the Municipality of Metropolitan Toronto (“Metro”). Metro is a second tier level of local government for the MetropolitanToronto area; this area includes the Borough of East York, the City of Etobicoke, the Cityof North York, the City of Scarborough, the City of Toronto and the City of York. Metro councillors from each ward in the Metro area are elected to Metropolitan Council.

3Metro provides a wide range ofservicestotheresidentsofMetrowhichincludeplanning,roads and traffic,water,communityservices, ambulance services, policing, refuse disposal, public transit,a zoo,and the public reference library. These services are delivered by 14 departments and 13 agencies, boards, and commissions ofthe Metro Corporation. It is the relationship between Metro and one of these boards, the Metropolitan Toronto Library Board, that is the issue in this case.

7. The Metropolitan Toronto Library Board (“Library Board”) is a "local board" of Metro and its existenceand structurearedefinedpursuant toPartIXofthe Municipality of Metropolitan Toronto Act. The LibraryBoardisa Corporation composed of the Chair of Metro Council or his or herdesignate,one person appointed by each of the six area municipalities, an appointee of the Metropolitan School Board, anappointeeofthe MetropolitanSeparate School Board, and two persons appointed by Metro Council. The Act provides that each year the Library Board submit to Metro Council an estimate of its financial requirements for the year. Metro Council may amend such estimates; it pays the Library Board such

amounts as may be requisitionedfromtime to time out of the monies appropriated for the Library Board. The Library Board requires the approval of Metro Council to acquire, lease or dispose of property, to erect, maintain and repair buildings, or to alter such buildings. The Library Board may sue or be sued in its own name.

4Although the Library Board is also governed by the Public Libraries Act, 1984 S.O. 1984 c.57 and is deemed to be a special library service board under this Act; for the purposes of this case, the more specific provisions of Part IX of the Municipality of Metropolitan Toronto Act prevail.

5It was the position of Metro and of the Library Board that the Library Board is an autonomous entity with the power and responsibility to run the Library. Theycontendedthatthe only link with Metro is that Metro funds the annual appropriations for the Library Board, a one line budget item in Metro's annual budget. Metro and the Library Board maintainedthatthe LibraryBoardwasfreetospend itsfunds within its annual appropriation. Their position was that Metro simply acted as paymaster for the Library Board and that Metro had no control over the operations of the Library.

6In determining who is the employer, the Tribunal starts with the applicable statutes; we then go beyond the formal provisions ofthe statutesto examine the realitiesofthe relationship between Metro and the LibraryBoard to determine, for pay equitypurposes, who hasfundamentalcontroloverthe staffatthe LibraryBoard Bagby v. Gustavson International Drilling Co. Ltd. (1980), 1980 ABCA 227, 24 A.R. 181 (Alta. C.A.) at p. 201; Manley Inc. v. Fallis (1977), 1977 CanLII 3487 (ON CA), 2 B.L.R. 277; 38 C.P.R. (2d) 74 (Ont. C.A.) at p.279.

WHO IS THE EMPLOYER?

11. The term"employer" is not defined in the Pay Equity Act, 1987. Courts and other tribunals have developed diverse criteria to define employer under other statutes, depending on the issues in dispute and the legal context. For example, under the Income Tax Act "employer"isdeterminedby considering who is responsible for the payment of salary or wages (sections 153(1) and 248(1) In re Bankruptcy of G. &

G. Equipment Co. Ltd. (1973), 74 D.T.C. 6407 (B.C.S.C.)). In disputes concerning whether an employer is responsible in law for the negligent acts of an employee, the courts have used a four-fold test:

(1) control; (2) ownership of tools; (3) chance of profit; (4) risk of loss (City of Montreal v. Montreal LocomotiveWorksLimited, 1946 CanLII 353 (UK JCPC), [1946] 3 W.W.R. 748 (P.C.) at p.756). This test has not been adopted by tribunals dealing with employment and labour relations matters, but instead these tribunals have developed criteriawhichareofgreater assistance in employment cases. The following criteria havebeenconsidered in determining who is the employer by the Ontario Labour Relations Board:

(1) The party exercising direction andcontrolovertheemployeesperformingthe work.

(2) The party bearing the burden of remuneration

(3) The party imposing the discipline

(4) The party hiring the employees

(5) The party with the authority to dismiss the employees

(6) The party who is perceived to be the employer by the employees

(7) The existence of an intentionto create the relationship of employer and employee...

York Condominium Corporation, [1977] O.L.R.B. Rep. Oct 645 at p.648.

1 The term "employer" should take its meaning from the purpose and context of the statute under consideration,inthis case, the Pay Equity Act, 1987. (Cormier v. Alberta Human Rights Commission et al. (1984), 85 C.L.L.C. 16,018 at p. 17,003 (Alta. Q.B.); R. v. Pereira (1988), 1988 CanLII 3477 (AB QB), 20 C.C.E.L. 187 (Alta. Q.B.)). Tests or criteria to determine who is the employer must be developed which are consistent with the purpose of the Pay Equity Act, 1987 and which fit in the context of the statute.

2 The purpose of the Pay Equity Act, 1987 is to redress systemic gender discrimination in compensation for work performed by employees in female job classes (subsection 4(1)). The Preamble sets out the goal of this Act as affirmative action to redress gender discrimination.

3 The Courts have described discrimination as a distinction whether intentional or not, based upon grounds relating to personal characteristics of the individual or group. Such a distinction may impose burdens, obligations, or disadvantages onsuchindividuals orgroup notimposed upon others, or withhold or limit access to opportunities, benefits, or advantages available to other members of society (Andrews v. Law Society of British Columbia (1989), 1989 CanLII 2 (SCC), 36 C.R.R. 193 (S.C.C.) at p.228).

15. The Supreme Court of Canada has accepted the approach to systemic discrimination found in the Abella Report on equality in employment. Judge Abella said:

Discrimination... means practicesor attitudes that have, whether by design orimpact,the effect of limiting an individual's or a group's right to the opportunities generally available because of attributed rather than actual characteristics .

...It is not a question of whether this discriminationismotivatedbyanintentional desire to obstruct someone's potential, or whether it is the accidental by-product of innocently motivated practices or systems. If the barrier is affecting certain groups in a disproportionately negative way, it is a signal that the practices that lead to this adverse impact may be discriminatory .

... This is why it is important to look at the results of a system.

Report of the Commission on Equality in Employment Judge Rosalie Abella, Commissioner October, 1984 at p.2; Canadian National Railway Company v. Canadian Human Rights Commission (1987), 87 C.L.L.C. 16,255 (S.C.C.) at p.17,022. Moreover, the Court said that to combat systemic discrimination, it is essential tocreate a climateinwhich both negative practices and negative attitudes are discouraged. The Abella Report stated that remedial measures of a systemic and systematic kind are the objectofemploymentequityandaffirmativeaction. They are meant to improve the situation for individuals who, by virtue of belonging to and being identified with a particular group, find themselves unfairly and adversely affected by certain systems or practices (Abella Report, supra at p.9).

1 Having reviewed these discrimination cases, the mandate of the Pay Equity Act, 1987 to remedy systemic discrimination in compensation, is specific and different from the legal context in which the four­fold test was developed. The criteria used to determine vicarious liability are not helpful in determining who istheemployerinthecontextofpayequity. Moreover, the test of ownership of tools, chance of profit, risk of loss are of no assistance to the Tribunal in determining who is the employer in this public sector case.

2 It was the Library Board's position that the employer in the pay equity context must be defined as the entity that is the party to the collective agreement. Counsel for the Library Board submitted that there is a close and consistent interweaving of labour relationsandpayequityconcepts. It was his position that the drafters of this legislation intended that the pay equity employer would be the collective bargaining employer. Counsel stated that if the Tribunal named a non-collective bargaining entity as employer, it would do violence to the Pay Equity Act, 1987 and would give the Act a shape it was never intended to have. He stated that to inject Metro into the pay equity negotiations at the Library would do violence to thelabourrelationsreality, as itisthe LibraryBoard,notMetro, whichisbound bythe collective agreement with the Union.

3 Counsel for the LibraryBoardfurthercontendedthattheemployerforpayequitypurposesmustbe the entity that has the power to hire and fire library workers in order that the various sections of the Pay Equity Act, 1987 are consistent. It was his submission that, in a case where the Tribunal decided that a library worker had been dismissed, contrary to subsection 9(2) of the Act, the Tribunal would be limited toorderingthepayequityemployertoreinstatethisemployee. It was the Library's position that if such an order were made against Metro, it would be unenforceable, as the Library Board, not Metro, has the power to hirelibraryworkers. He wished the Tribunal to conclude that the entity which has the power to hire and fire under the collective agreement must be the pay equity employer.

4 It was the Library Board's position that negotiating a pay equity plan involves exchanging information and making comparisons between jobs. It is the parties to the collective agreement that establish the jobs, the rankings, and the compensation structure for the bargaining unit. Counsel said that only the Library Board has this information and that only the Library Board can intelligently and fairly analyze the jobs at the Library. Once a pay equity plan is negotiated, the adjustments are incorporated into the collective agreement. The only parties able to enforce the pay equity adjustments and to maintain pay equity are therefore the parties to the collective agreement. Their position was that the only possible employer for pay equity purposes must be the Library Board.

5 The Tribunal rejects the assertionthat the employer for pay equity purposes must be the employer named in the collective agreement. Whereas the Act defines "bargaining agent" with specific reference to the Labour Relations Act, R.S.O. 1980 C. 228 as amended,thereisno parallelreferencefor"employer". In many fact situations the two employers will coincide. In other fact situations a different employer may be more appropriate in the pay equity context. Where there is a dispute, it falls to the Tribunal to determine, for pay equity purposes, who is the employer of those in dispute. The Tribunal will consider, but is not limited by, the parties named in the collective agreement.

6 The employer for pay equity purposes and the bargaining agent are responsible for negotiating both thejobcomparisonsystem and the pay equity plan for the bargaining unit. Both are responsible under the Pay Equity Act, 1987 for the process and the content of the negotiations. It is the adjustments to compensation that flow from the plan that are incorporated into the collective agreement, and not the pay equityplanitself(ss.13(10)). There is an ongoing responsibility to maintain pay equity, which lies outside the collective agreement, and is given by law to the pay equity employer and to the bargaining agent (section 7). In negotiating future collective agreements, the parties to that agreement must negotiate compensation rates that are consistent with pay equity. To decide a pay equity employer different from the collective agreement employer does no violence to the Pay Equity Act, 1987, but rathermaybe more effective in remedying systemic discrimination in the organization of the workplace. Pay equity plans will affect the compensation rates in the collective agreement and future collective agreements must be negotiated in such a way as to maintain pay equity. To look at the Metropolitan corporation as a whole may require a re-examination of the traditional collective bargaining relationships in order to fulfil the mandate of the Act.

7The Tribunal is not prepared to find that the pay equity employer must be the entity which has the power to hire and fire under the collective agreement. The focus of this Act is compensation, not the control over or exercise of the power to hire and fire. These rights continue in the collective agreement. Nonetheless,counselforthe LibraryBoardasked the Tribunaltoaddressthehypotheticalquestion:against whomwould reinstatement be enforcedinthe event thatan employee were dismissedcontraryto the Act? As this issue is not before this panel, we do not feel that it is necessary or helpful to answer in this case. Put another way, what the Library Board has asked us to do is to interpret subsection 25(2)(b) in the absence of any facts. It is not clear that section 25(2)(b) should be interpreted in the manner suggested bycounselfortheLibrary. For example, the section provides a remedy for the violation of subsection 9(2). Thissectionappliestotheemployeroranyone acting on its behalf. It may well bethatevenifMetrowere found to be the employer for pay equity purposes, it may be held responsible for the dismissal of an employee contrary to this Act. Moreover, the Tribunal may find it helpful to refer to other jurisprudence, including the common law of agency, or decisions of the courts, labour boards, or human rights tribunals, in answering the question of liability and in fashioning appropriate and effective remedies. As the jurisprudence of pay equity is evolving, the issue of liability raised by counsel for the Library ought not to be determined without a factual basis nor without the benefit of submissions based on actual facts.

23. In the alternative, it was the position of the Respondents that the Tribunal should use the same criteria as developed by the Labour Board to determine who is the employer. The purpose of the Labour Relations Act is to further harmonious relations between employers and employees by encouraging the practice and procedure of collective bargaining between employers and trade unions as the freely designated representatives of employees. The Labour Board cases whichhave developed the criteria for who isthe employer have done so in the labour relations context and to promote the purpose ofthat Act. The Pay Equity Act, 1987 was enacted to remedy the effects of systemic wage discrimination including thoseeffectsthathaveresultedfromthelabourrelationscontext. It would be inappropriate for the Tribunal to adopt the criteria developed by the Labour Board for determining who is the employer, without considering whether the criteria areapplicable inthe context ofpayequityand whetherthey are consistent with the purpose ofthe Pay Equity Act, 1987. This statute, which is an affirmative action plan to remedy

systemic discrimination in compensation, is remedial in nature. Its aim is to identify and eliminate discrimination including systemic discrimination which has arisen out ofthe traditional labour relations and collective bargaining processes. The Act requiresa reviewofthecurrentcompensationpracticesinexisting collective agreements and positive steps within a timetable to remedy systemic discrimination. The remedies must be effective and consistent with the anti-discriminatory nature of the Act (Robichaud v. Canada (Treasury Board) (1987), 1987 CanLII 73 (SCC), 8 C.H.R.R. D/4326 (S.C.C.) at p. D/43-31). The Tribunal has decidedtodevelopcriteria whichwilleffectthe purpose ofthe Pay Equity Act, 1987, ratherthanto adopt those used by the Labour Board.

8In its decision in Haldimand-Norfolk (No.3) (1990), 1 P.E.R. 16, the Tribunal set out four tests orcriteriatobeappliedwhenapproachingthequestionofwhoistheemployer. The Tribunal did not intend these tests to be exhaustive. As with any new statute, interpretation must be approached in an incremental fashion, having regard to the possibility that future cases may refine these tests. The criteria which the Tribunal in that case found useful to apply were:

1. WHO HAS OVERALL FINANCIAL RESPONSIBILITY?

Indicia of this testinclude:Who hasresponsibilityfor the budget? Who bears the financial burden of compensation practices, and the burden of wage adjustments under the Act? Who is responsible for the financial administration of the budget? What is the shareholder investment or ownership? Who bears the responsibility of picking up the deficit or benefitting from the surplus?

2. WHO HAS RESPONSIBILITY FOR COMPENSATION PRACTICES?

The indicia forthis criteria include:Whosetstheoverallpolicyforcompensationpractices? Who attaches the value of a job to its skill, effort, responsibility and working conditions? What is the labour relations reality, who negotiates the wages and benefits withthe union or sets the wage rate in a non-unionized setting?

1 WHAT IS THE NATURE OF THE BUSINESS, THE SERVICE OR THE ENTERPRISE? Within this test the following are helpful indicia: What is the core activity ofthe business,serviceorenterprise? Is the work in dispute integralto the organizationor is it severable or dispensible? Who decides what labour is to be undertaken and attaches that responsibility to a particular job? What are the employees' perceptions of who is the employer?

2 WHAT IS MOST CONSISTENT WITH ACHIEVING THE PURPOSE OF PAY EQUITY ACT?

If there is more than one possible employer, it assists the Tribunal in its determination to make reference to the purpose and objectives of the Pay Equity Act, 1987.

1 It was the position of the Respondents that this panel was not bound by the decision of another panelin the Haldimand-Norfolk case and further, that we should not follow that decision,as it was wrongly decided.

2 The Pay Equity Act, 1987 is a new statute with application to a broad range of employers, employees, and tradeunions,allofwhommustcompletethe payequityprocess within the timelines set by the statute. There is verylittlejurisprudencefromotherjurisdictionstoassistthepartiesininterpreting and applying this Act. Therefore, one of the goals of this Tribunal is to provide decisions and reasons which notonlydetermine the issuesbetweenthe partiesbut alsoassistotherpartiestomeettheir obligations under the Act. Although in law, one panel of a Tribunalisnotboundbythedecisionsofanother panel, both are panels of the same Tribunal. Decisions of the panels are decisions of the Tribunal. Employers, employees and trade unions are entitled to uniformity and certainty in the interpretation and the application of this statute. Consistency in the Tribunal's decisions will provide certainty and direction to the parties, will assist them in negotiating pay equity plans, will promote settlement of similiar issues, and will discourage multiplicityofproceedings (Blake and Amalgamated Transit Union and the Crown in Right of Ontario (TorontoAreaTransit OperatorsAuthority), GrievanceSettlementBoard#1276/87decisiondatedMay 3, 1988; Consolidated Bathurst Packaging Ltd., [1983] O.L.R.B. Rep. Dec. 1995 at par. 6). On the other hand, the jurisprudence in pay equity is evolving. The Tribunal is not persuaded that Haldimand-Norfolk waswronglydecided. Moreover, this decision has been recently upheld by theDivisionalCourt (decision released November 23, 1989). The four criteria set out in that case for determining who is the employer are appropriate to be used in this case.

3 In the alternative, the Respondents submitted that the Tribunal should add a fifth test to the criteria set out in Haldimand-Norfolk. The proposed criterion, who has fundamental control over the working livesand the workingenvironmentofthoseindispute,isthe testusedinlabour relations disputesto evaluate which criteria in a given set of circumstances, are most indicative of an employer/employee relationship (Kennedy Lodge, [1984] O.L.R.B. Rep. July 931 at p.957; Sutton Place Hotel, [1980] O.L.R.B. Rep. Oct. 1538 at p.1552).

4 In Sutton Place Hotel, the Labour Boardreconciledor balancedthe sevencriteria set out in York Condominium by reviewing and considering the purposes of the Labour Relations Act; in Kennedy Lodge itasked the question:"forthe purposes of labour relations, who hasfundamentalcontroloverthose in dispute?"

5 The criteria in Haldimand-Norfolk were developed to determine "for the purpose of pay equity, who has fundamental control over those in dispute". The Tribunal reconciled or balanced the first three criteria by reviewing and considering the purposes of this Act in a way analogous to the review or consideration given by the Labour Board in Sutton Place Hotel. In other words, the fourth criterion in Haldimand-Norfolk is meant to be used by the Tribunal to evaluate which of the first three criteria, in a given set of circumstances, are most indicative of the employer/employee relationship. If the application of the first three criteria clearly point to anentityas the employer,resort to the fourth criterion may not be necessary. It will be used then, to reconcile or balance the first three criteria if their application leads to different entities as possible employers in a particular fact situation.

6 The Tribunal is not persuaded to add the criterion proposed by the Library Board as it is not substantively different from either the approach in Haldimand-Norfolk, or the approach outlined by the Labour Board in Sutton Place Hotel and Kennedy Lodge.

THE FACTS

31. The Tribunal heard evidence concerning the relationship between Metro and the Library Board in the following areas: budget, labour relations, financial accountability, and operations.

BUDGET

1 Metro has a centralized process for determining the budgets of departments, agencies, boards, and commissionsofMetro. The budget reviewprocessisverydetailedandincludesathoroughanalysisofthe programmes and services provided by each of these entities. The process of formulating, analysing and approving the budget is a highly political process because the net funding required by the Metro Corporation is financed through the general tax levy. Metro Council, which ultimately approves the spending levels of each department, agency, board and commission, is accountable for the services provided and for ensuring that the taxpayer receives value for dollars spent. Various subcommittees of Metro Council and ultimately Metro Council recommend the appropriate funding requirements of each agency and the management actions which are to be taken for the coming year.

2 The Library Board is required to follow the same budget process as every other department, agency, board and commission of Metro. The budget process has two components: capital expenditures and operating funding.

3 The Tribunal heard the evidence of Shekhar Prasad, the Director of the Budget Analysis and Internal Control Division of the Treasury Department of Metro. Mr. Prasad is responsible for processing and co­ordinating the operating and capital budgets for the Metropolitan Toronto Corporation. He has been involvedwiththeLibraryBoardbudgetsince1978. The Tribunal found Mr. Prasad to be a well informed, forthrightandcrediblewitnessconcerning the budget process ofMetroandtheLibraryBoard. Wherever there were conflicts in the evidence, the Tribunal has accepted his evidence.

4 Mr. Prasad said that the primary purpose and focus of the Metro budget process is to provide analyticsupporttothepoliticianswhohavetheresponsibilityforcontrollingthepursestrings. As politicians must answer to the taxpayers for any tax increases, they must be able to justify the reasonableness of the expendituresand the levelofservices provided by the departments, agencies, boards and commissions of Metro. If Metro did not have such an analytic process, the politicians would be limited to blunt instruments such as across-the-board increases, oredictssuchas"therewillbenonew programmes". The politicians decide what level of tax increases they are prepared to support. The budget process provides the politicians with the necessary information to allocate funds to different programmes based on the current political priorities. In 1989, Metro's basic tax levy was $800 million.

5 Each summer, Mr. Prasad sends a Budget Manual to each department, agency, board and commissionofMetro,toenablethemtopreparetheir capital and operating budgetsforthenextyear. The manualofinstructions setsout how the budget is to be prepared, Metro's estimate forinflationincosts for commodities and services, and a timetable for completion of the budgetary approval steps. The covering letter asks for 30 copies of the proposed budget to be delivered by early November so that Metro's composite budget can be presented to Council by mid-November.

6 The Treasurer and Manager of Financial Services for the Library Board receives this request each year. Each manager in the library is asked to prepare his or her projections for the next year and to justify any requests for additional funds and new programmes. These requests are reviewed by the senior management of the Library and revisions are made. The requests are consolidated and reviewed by the Director of the Library to ensure that the requests are reasonable. The budget request is then presented to the Library Board for discussion and approval. The 1989 Operating Budget for the Library was $22 million. With revenue of $3.874 million, the net cost to Metro was $18.284 million. Metro provides 88 percent ofthe fundsforthe LibraryBoard;8 percent comesfrom the ProvinceofOntario bywayofgrants forspecialprojects suchasthe LiteracyProgramme;and 4 percent comesfrom internallygeneratedfunds, largely photocopy revenue.

7 The budget request for the Library Board is a detailed and thorough analysis of the planned expenditures, new programmes and services for each year and a cost justification of each item. The Library prepares a New Equipment Listing and Justification Report to seek permission to purchase even small items such as ladders or a calculator for $100.00. Each proposed new programme must be describedandjustifiedintermsofacost-benefitanalysis. The Library reports to Metro on its establishment and staff strengthforboththecurrentyearandthenextyear. This staffing report includes positions vacant, positions to be filled, and requested positions to be added. Salary costs are provided for the budget year and on an annualized basis from information generated by the Library Board; the expected dates of employment and the justification for all new positions are set out. The Library must report to Metro on all other labour costs including overtime, temporary staff, planned reclassifications and gapping. Gapping is anarithmetic goalortarget,expressed as a percentage oftotal salary dollars, which represents the savings expected as a result ofthe time periodbetweenstaffleavingpositions due to retirement,resignation, illness or maternity leave and persons being hired to fill these vacancies. On one hand, gapping can and does occur naturally due to staff turnover. On the other hand, the Library Board can choose to gap positions in order to decrease salary costs. It is clear that the gapping target set during the budget process has an impact on the staff, either by reducing the level of service to the public or by distributing the same amount of work among fewer employees. Finally, pay equity adjustments for library workers will be included in the 1990 budget process.

39. When the Library Board has a collective agreement which spans the budget year, the negotiated salariesareusedasthebasisforbudgetaryprojections. If the collective agreement is still to be negotiated, theLibrarylists the current salaries in the budget. In addition, the Treasurer of the Librarydiscusseswith Mr. Prasad what the projected salary increases are likely to be. Mr. Prasad will have had consultations withMetro'sPersonnelDepartment to gettheir best estimateofwhatMetro's labour negotiations are likely to result in andthisinformationissharedwiththeLibrary. The agreed-to amounts are set aside in Metro's

corporate contingency account. When the collective agreement is settled, the Library Board asks Metro Councilforauthorizationtodrawdowntherequiredamountfromthecontingencyaccount. Metro Council hasalwaysapprovedsuchrequests. Mr. Prasad testified that it was possible for the Library Board to settle a collective agreement for salaries in excess of the funds set aside in the contingency account. Although this has never happened at the Library Board, Mr. Prasad testified that it had happened at the Police Commission. Metro Council approved the transfer of these amounts because there were sufficient funds in the corporate contingency account to accommodate this request.

8 Each department, agency, board and commission of Metro is required to establish a list of Programme Priority Reductions. The Library Board lists the programme expenditures the Board is prepared to cut from their budget request in reverse order of priority. For example, in 1989 the Library listed as the fourth item the provision of audio visual staff on Saturdays. The total of the items on this list mustreducethe budget request by five percent or bringthe budgetrequestbelowthe appropriationforthe previous year. The purpose of this exercise is to permit the Library staff and Metro staff to effectively analyze the budget requests.

9The Library Board forwards its budget request to the Budget Analysis and Internal Control Division of Metro. This Division reviews all budgets, keeping in mind Metro Council's guideline, that the mill rate for a given year should not exceed the inflation rate. Although this guideline is exceeded in some budget years, any increase greater than the inflation rate must be justified politically.

10A budget analyst is assigned by Metro to review the Library's budget. The Library Board characterized this review as checking the arithmetic and the accounting assumptions. The Tribunal does not agree that this characterization accurately captures the nature or extent of the budget review process. The budget analyst sits downwiththe Librarystaffand goesoverthe budgetrequestsand preparesa draft report that analyzes the request and the explanations given for the increases. For example, any unusual increase above and beyond inflation is singled out as are any new programme initiatives. Most often consensus is achieved, although on occasion both sides have maintained their positions on certain items. The budget analyst sends a draft of his report to the Library staff. After receiving comments, the report isgivento the memberofMetro's Management Sub-Committeewho isresponsible forthe Librarybudget. That person is a Metro Councillor, at present Anne Johnston. The report contains the recommendations of the budget analyst to modify the Library's proposed budget.

11AninternalreviewmeetingisheldwiththememberofManagement Sub-Committee, senior Library staff and the budget staff of Metro. The Chairman of the Library Board attends these meetings along with the budget analyst, the Assistant Director and the Director of Metro's Budget Division, and the Chief Administrative Officer for Metro. The purpose of the meeting is to prepare the Management Sub-Committee member's report. At the meeting, issues in dispute are discussed at great length. This is an opportunity for the Library staff to make their submissions directly to the politican, the Management Sub-Committee member. It is then the member's decision to go either with the budget analyst's recommendations or with the Library stiff's request, or to compromise. After the meeting, the budget analyst prepares a report for the Management Sub-Committee meeting based on the member's decisions about outstanding items. The report is then approved by the member.

12The member's report concerning the budget for the Library goes next to Management Sub-Committee, a sub-committee of Executive Committee of Metro made up seven Metro Councillors. Reports are received from all departments, agencies, boards andcommissionsofMetro. The task of this Committeeistoestablishthefundinglevelforthewholecorporation. This is a public meeting which Library Board staff attend. The Metro Councillor presents the Library budget and her recommendations. In the normalcourse,Management Sub-Committeeapprovesthe reportsofitsmembersandforwardsthe report toExecutiveCommitteeofMetrowhichestablishesthefundinglevelfortheMetroCorporation. Executive Committee reviews the recommendations of Management Sub-Committee and prepares a consolidated report which pulls together the reports of all the Management Sub-Committee members for each of the departments, agencies, boards and commissions of Metro. Again, meetings of Executive Committee are public and the LibraryBoard attends. Finally, the budget goes to Metro Council which reviews the report ofExecutiveCommittee. Metro Council adopts this reportasMinutesofCouncil. Metro's appropriation for the Library Board is the net cost of library services. Thatisthebottom-lineamountoverwhichMetro actually has control. The Library Board cannot overspend this amount without getting Metro Council's authority.

13The Metro budget staff, the member of Management Sub-Committee, and the Library Staff try to reach consensus on the programmesandservicesproposedinthebudget,which is usually achieved. The Tribunalheardevidenceofthreesignificant disputesbetweenthe Libraryand Metroin the budgetprocess. The first occurred in 1981 in which the Management Sub-Committee member recommended cuts of approximately$1.2milliontothe Library budget. The Library staff felt very stronglyaboutthenatureand level of these cuts. Both sides stuck to their respective positions and no compromise was reached. The Library Board attended at the Management Sub-Committee meeting and made a presentation to that committee. Nevertheless, the committee upheld the member's report. The Library Board then attended at the Executive Committee meeting to make further submissions concerning their budget. Executive Committee rejected those submissions, upheld the report of Management Sub-Committee and forwarded it to Metro Council. The Library Board lobbied members of Metro staff and Metro Councillors extensively before the budget went to Metro Council. Metro Council added $417,000.00 back into the Library budget. As a result of this lobbying, the Library Board was able to restore one-third of the proposed budget cuts.

14The Director of the Library, Frances Schwenger, testified that in 1983 the Management Sub­committee member arbitrarily removed$100,000.00fromthe Library budget. The Library staff strongly opposed this move but were unsuccessful in effecting change and were required to re-allocate money internally to accommodate this further reduction to their budget.

47. In 1987, the Management Sub-Committee member decided on his own initiative to require the additionof$50,000.00totherevenueportionofthe Library's budget by raising thephotocopyrates. The Library staff had no notice of this proposal and strongly objected. Despite these objections, the Metro Councillor took the position that he wanted it and that he would put it in his report. His report went forwardtoManagementSub-Committeewiththisitemincluded. Both the Treasury staff of Metro and the Library, staff concluded that this was an impractical recommendation. A compromise was reached in whichthe Librarydid nothave to raise the extra$50,000.00inphotocopyingrevenue,but itsexpenditures

were reduced by $50,000.00. Management Sub-Committee amended the member's report to reflect the compromise.

15In summary, it is clear that Metro is more than a source of fundsfortheLibraryBoard. The nature and extent of the budgetprocessdemonstratesitsclosecontroloverthe programmesand services offered by the Library Board. Metro reviews and approves staffing decisions such as adding new staff, reclassifying staff, and gapping. The Tribunal was provided with the budget documents from 1981 to 1989. Every year, Metro Council sets the appropriation level for the Library Board at substantially less than the budgetrequestedbytheLibrary. During the budget process, the LibraryBoardisrequiredtoexplainarid justifyitsprogrammes,servicesandproposedexpenditures. The budget analyst and the Management Sub-Committee member can and do choose amongst the programme priority reductions set by the Library Board. The budget process is generally done by consensus, a reality no doubt attributable to the negotiating skills of the parties. At the same time the reality is that the process is highly political and the ultimate determination of the budget is made by the politicians.

16Metro Council approves an appropriation to the Library Board, a single figure which represents the net cost to the Metro Corporation of the Library's programmes and services. The politicians have, in theory,greaterscrutinyoverdepartmentbudgetsbecause Metro Councilapprovesseparateappropriations for their different programmes. However, the evidence is that the level of scrutiny of the Library, budget during the budget process is so detailed as to make this distinction meaningless. Therefore, it is Metro which exercises fundamental control over the Library's budget.

LABOUR RELATIONS

1 TheUnionhasnegotiated successive collective agreements with the Library Board. The collective agreements are signed by the Library Board, and not by Metro. In the collective agreements the Union recognizes that the Library Board, as employer, has the exclusive right to hire, fire, and discipline employees;classifyjobsandmanagetheoperationsoftheLibrary. It is not disputed that the Library Board has these powers and exercises them. Metro plays no role in these functions. Although both the Library and Metro are organized by locals ofthe CanadianUnionofPublic Employees, there is no interchange of employees from the Library to Metro, nor from Metro to the Library. Library Board employees are consideredexternalcandidatesforMetrojobs. The collective agreement at the Library has similarities with the collective agreements at Metro, but there are also differences. The Library has its own personnel department and retains separate legal counsel to represent the Library with respect to labour matters. It was the position of the Respondents that the Library is separate and independent of Metro with respect to labour relations. The Director of the Library, Frances Schwenger testified that Metro played no role in the Library's labour relations; the Library Board ran its own show. In contrast, it was the Union's position that although Metro was not at the bargaining table, the presence and control of Metro was felt throughout the collective bargaining process.

51. It was the Union's position that in salary negotiations the Library Board followed Metro's negotiations with its unions. Two union negotiators, Risa Pancer and Judy Darcy testified that in all the roundsofcollective bargainingsince1979,the LibraryBoard did nottable itsmonetaryproposaluntilafter

Metro had settled with its unions. Ms: Pancer testified that the union was told that the Library could not do so earlier, because "the tail could not wag the dog". It was the evidence of the Unionthat the Library workers receivedexactlythe same settlement asthe Metroemployeesineveryyearofcollective bargaining since1979,withthreeexceptions. In 1980, after a short strike, the Libraryemployeesnegotiateda$200 lump sum payment to offset the lost earnings during the strike. The Union negotiated a cash equivalent instead of theimproveddentalridernegotiatedbytheunionsatMetroin1981. The 1989 settlement gave Library workers a .75 per cent increase in salary above that negotiated by Metro's unions. The wage increases for 1990 and the wage re-opener provisions are identical for all three unions.

2 Beginning in 1982, the Union at the Library tabled proposals to reduce the work week for some of itsmembersfrom40hoursto35 hours. Local43oftheunionhadputforwardthesamedemandtoMetro in the same year. Negotiators for the Library Board said that when Metro agreed to the shorter work week, the Library Board would agree. The same issue arose during the 1988 round of collective bargaining. Judy Darcy testified that Mr. LeForte, the Personnel and Labour Relations Manager of the Library, said thatthe Librarydid nothave the "authority"to grant this demand untilitwasgrantedto Locals 43 and 79 of Metro. Mr. LeForte was not called as a witness.

3 Risa Pancer testified that the negotiators for the Library Board advised the Union that any negotiated settlement with the Library would have to bechecked forcontent and language bythe legaldepartment of Metro. This was denied by the Library Board and by Metro. Nonetheless, the minutes of the Summer Executive Committee of the Library Board dated August 5, 1982, state that "the Chairman [of that Committee]be asked toendorsethe official contract documents, pending official ratification bythe Metro Corporation legal authorities".

4 In 1984, the Union and the Library Board were embroiled in bitter and protracted labour negotiations. After five months of bargaining,theunionwentonstrikeonOctober 1. The union mounted a campaign to put public pressure on the Library Board to change its negotiating positions. The Library workers lobbied Metro councillors to inform them of the issues, to get Metro Council to put pressure on the Library Board, and to get Metro to intervene in the Library negotiations. The Union met with Metro councillorsand on October 23, 1984, Metro Council passedaresolutionrequestingtheLibraryBoardto resume bargaining immediately. The Metro Chairman was requested to report back to the Executive Committee on the progress of the Library negotiations. Council also asked Management Subcommittee to review all the collective agreements of the agencies, boards and commissions of Metro to establish common non-monetary practices for all Metro employees.

55. After the motion onOctober23,1984,twomeetingswereheldbytheMetroChairmanconcerning labour relations at the Library. The first was with the Chairman of the Library Board. The second, held aweeklater,waswithcounselfortheLibraryBoard. Peter Ferguson, theCommissionerofPersonnelfor Metro, attended both meetings. He explained that the purpose of the meetings was to enable the Metro Chairmanto gaininformationabout the strike so that he would be able to report to Metro Council that he had met with the Library and was aware ofwhatwas going on. Mr. Ferguson testified that there was no direction given to the Library Board concerning the strike or the negotiations. The strike ended on

November 9, after the Library Board removed most of its demands from the bargaining table and agreed to a monetary settlement which was the same as the settlement agreed to between Metro and its unions.

5 After the strike wassettled,theChiefAdministrativeOfficerofMetro, John Kruger, was asked by Management Sub-committee to review the collective agreements of the agencies, boards and commissions ofMetrotoestablishcommonnon-monetarypracticesfor allMetroemployees. The Metro Solicitor gave his opinion that the main areas of control that Metro has over these entities are Metro's appointment of members to their boards and Metro's provision of funds. Otherwise, these are autonomous bodies and, should Metro attempt to control their day-to-day actions and methods, it would probably be exceeding its jurisdiction. Despite this legal opinion, Mr. Kruger asked the Personnel department of Metro to review the thirteen collective agreements of the agencies, boards and commissions of Metro, including that of the Library Board. Mr. Kruger recommended that the Library Board be brought into the mainstream of Metro'scollectiveagreementbargainingprocess, notfromthe perspective ofMetro dictatingto the Library somuchastheLibrary'sstaffbeingawareoftrendsinthetotalMetrosystem. In addition, Council adopted the recommendation that once each year the senior staff administrator, together with the appropriate personnelstaffofeachagency, board or commissionof Metro, meet with the ChiefAdministrative Officer of Metro and the Commissioner of Personnel to exchange information ongeneralworkingconditions and collective agreements,inanattemptto have consistency, whereverappropriate,inthe respective collective agreement clauses. In addition, prior to the commencement of bargaining, each agency, board or commission staff should consult with the Metro Commissioner of Personnel to identify any particular problem. There were two such meetings held in 1985 arid 1986 to exchange information. Peter Ferguson testified that the collective agreements were so different that it was not useful to continue meeting. No further meetings have been held.

6 The Tribunal has concluded that although Metro does not attempt to direct the day-to-day labour relations at the Library, Metro influences the conduct and content of collective bargaining for the Library. This influence may not be so muchthe result ofMetro directingthe activitiesof the Library, but rather, the Library conducting itself at all times so that the Library Board follows Metro with respect to collective bargaining and never leads. Perhaps it was bestsummedupinthephrase"thetail must not wag the dog".

FINANCIAL ACCOUNTABILITY

1 As noted above, Metro approves a single appropriation amount for the Library Board. It is the positionofthe Respondentsthatthe LibraryBoard isfreeto move moneyfromone programme to another, to hireadditionalstaff, and to add newprogrammes during the year so long asitstotalexpendituresdo not exceed its appropriation. The Library Board, as all other departments, agencies, boards, and commissions ofMetro, mustprepare quarterly variancereportswhichdocument the differencesbetweenprojectedand actual spending for each programme. The Respondents note that Metro receives these reports after the moneyhasbeenspent and thereforeisina position to monitor what has happened but not to controlwhat will happen. Finally, Metro receives the benefit from any surplus at the Library.

59. The Library Board cananddoesspendmoneyinprogrammesotherthan what has been budgeted. This occurs because budgets are estimates for the coming year, and circumstances may change requiring

modifications to programmes and services. But the Library is not free to take money from Metro for a particular project and then use it for anentirelydifferentpurposewithoutjustifyingthisshift. For example, ifthe LibraryBoard decidedto hireadditionalpermanent staffduringa budgetyear,itwould have to report and account for this decision to Metro during the next budget process. Moreover, Metro would have to approve the funding of these positions on a full year permanent basis. The Library staff prepares monthly variance reports outlining changes in spending plans together withexplanation. These are attached to the agenda of Library Board Meetings. Copies of the agenda and attachments are sent to the Treasury DepartmentofMetroandreviewedby the budget analyst. Mr. Prasad testified that this information is sent so that Metro can stay on top of the Library budget. Should something concern the budget analyst, she or he is free to attend the Library Board Meeting. To date the analyst has not attended any meetings. The Tribunal finds that the Library Board is accountable for its finances within the same political process as exists for budget allocations. Deviations from programmes and services must eventually be justified. Therefore, in practice, Metro has substantial control over the operation of the Library Board.

60. The extent of Metro's control is best illustrated by the events of 1981 when the Library Board overspent its $13 million budget by $281,000. The Library Board requested that additional funds be drawnfromMetro'sCorporate ContingencyAccount to coverthe deficit.MetroCouncilwasnotpleased. Council approved the Library's request but directed the Management Services Department of Metro to prepare guidelines for the Library Board's financial reporting to Metro. The guidelines provide:

1 TheLibraryBoard'sestimatesshouldbepreparedaccordingtotheguidelinesissued by The Metropolitan Corporation.

1 Anoverruninoneprogrammecannotbeoffsetbyanunderruninanotherprogramme (Library Board's internal accounts) unless approved by the Library Board and the information conveyed to the Budget Sub-Committee member via the Management Services Department.

1 No excess of actual revenue over estimated revenue may be used by the Library Board to fund additional expenditure requirements without Budget Sub-Committee approval.

1 Anyplannedexpenditureduringtheyearfor a programmenotincludedinthebudget must receive prior approval of the Budget Sub-Committee.

1 Any increase in the approved net expenditure level must receive specific Metro Council approval prior to being incurred.

1 The Director should submit a monthly variance report with explanations on the current and projected total year financial position of the Library to the Board of Directors and include a list of actions required to ensure that the Metropolitan Corporation Financial guidelines are not compromised.

1 Financialreports onthe status of Library Board's operation should be submitted on a quarterly basis to the Management Services Department for review and forwarding to the Budget Sub-Committee member responsible for The Metropolitan Toronto Library Board.

Mr.Prasadwasaskedthestatusof these guidelines. HetestifiedthatwhereasintheorytheLibraryBoard could have disregarded these guidelines,practicallyitwasto their advantage to followthem as the Library wouldbecoming to Metro each year for funding. Mr. Prasad said that it is better fortheLibrarytokeep amutuallybeneficialrelationshipwithMetroandtheLibraryhadseenitthatway,aswell. These guidelines, issuedin1982,arestillineffecttoday. Mr. Prasad testified that the goal of Metro Council is to control the appropriation and to be advised of changes before rather than after the fact. These guidelines are a monitoring process and help to achieve this goal. Such guidelines do not exist for every agency, board and commission of Metro, but appear to be put in place when an agency overspends its budget.

1 The Guidelines are sound management practice and have been effective in achieving Metro's goals for the Library Board. Since 1982, the Library Board has not overspent its appropriation and has kept the Treasury Department up to date with respect to major significant changes in programme areas. Mr. Prasad definedsuchchangesas brand newprogrammeswhich would have a long term financial impact of one hundred thousand dollars or more.

2 It is the Tribunal's conclusion that whereas the Library Board appears to be autonomous in the spending ofitsappropriationfromMetro, the politicalrealityisthat the Library Board must live within that appropriation; it reports monthly on variation in the spending of its allocation; and must be prepared to justifyanysignificantdeviation. Metro exerts effective political control over the financial operationsofthe Library.

OPERATION OF THE LIBRARY

1 It was the positionoftheRespondentsthattheLibraryBoardisan autonomous board that runs the day-to-dayoperationsattheLibrarywithnoinputfromMetro. The Tribunal accepts that the day-to-day control of the Library rests with its Director, Frances Schwenger and with the Library Board.

2 Mr. Prasad testified that every five to seven years, the corporate consulting and policy group of Metro's Management Services Department goes in and reviews each department, agency, board and commission of Metro from a management perspective, to see if its mandate is still valid; asks whether the mandate should be updated; and determines whether the management practices are up-to-date. Mr. Prasad described this as a management review, that is, an overall comprehensive review that applies to everybody.

3 Management Services reviewed the operations of the Metro Library in 1985. Certain goals and objectivesfortheLibraryand a Mission Statementwereformulated. We heard no evidence of this review from the witnesses called by the Library. Nonetheless, the Tribunal accepts that such a comprehensive reviewoccurred, based ontheevidenceofMr. Prasad,the 1989BudgetDocumentsofthe LibraryBoard, and the covering letter the Director of the Library, Frances Schwenger sent to Mr. Prasad with the 1989 budget. It is clear that Management Services assisted the Library in developing a three year plan, with objectives and timetables. The Library's ongoing review of and revisions to this plan are reported annually to Metro Council through the Metro budget process.

4 This planning document sets out a Task and Milestone List. The Library Board reports to Metro ontheplannedstartandfinishdatesandtheactualstartandfinishdatesofeachofthe36objectives. These objectives include staff reorganization and training, revision of job descriptions, the extension of library hours, and the implementation of an effective inter-library loan system. The 1989 budget traced these objectives to determine if the timetable had been or would be achieved. The 1989 budget with this informationwasforwardedto the Management Services Department of Metro. Mr. Prasad testified that Management Services is probably still on top of these goals and objectives.

5 The Tribunal finds that Metro has reviewed or exercised supervision over the management of the Library. The Library Board may have been at liberty to ignore the report, but has chosen not to do so and has reported to Metro on the status of the implementation of the three year plan. Therefore, the Tribunal findsthatMetro monitorsthe management ofthe LibraryBoard and exerts,ineffect,controloverthe long-term operations at the Library.

DECISION

1 Applying the criteria to the facts of this case, the Tribunal finds that Metro has overall responsibility for the Library Board's budget; its budget is considered in the same manner as that of every other department, agency, board and commission of Metro. There is a detailed review by Metro of the programmes and services proposed by the Library Board. The extent of the review process is such that Metro cannot not be characterized simply as the paymaster or source of funds for the Library (Waterloo CountyRomanCatholic SeparateSchoolBoard, [1977]O.L.R.B. Rep.Dec.8656 atp.857; Province of Ontario Board of Internal Economy, [1980] O.L.R.B. Rep. Jan. 88 at p.89). Instead, Metro exercises substantial control over the Library Board's budget. Metro bears the financial burden of the compensationpracticesattheLibrary. Either salary increases are included in the annual request to Metro for funds, or the LibraryBoard asksMetro Councilto drawfromMetro'scontingencyfund the negotiated wage adjustments. The pay equity adjustments for the Library have been budgeted as one percent of payrollandareapartofthenormal 1990 budget processwhichMetrowillfund. Although the day-to-day financial administration of the budget is done by the Library staff, the Library Board is subject to Metro's financial reporting guidelines. Moreover, the Library staff reports monthly to the Library Board on variancesbetweenexpectedandactualexpenditures. Copies of the variance reports are sent to the Metro budgetanalystwhousesthesereportstokeepontopoftheLibrary'sfinancialsituation. Finally, the Library BoardadministerstheirbudgetinthepoliticalcontextofMetropolitanToronto; they must justify to Metro any changes to the programmes and services as part of the next year's budget. If the Library Board operates at a deficit it must seekadditionalfundsfromMetroCouncil. Metro benefits from any surplus at the Library. Therefore, Metro has the overall financial responsibility for the Library.

69. Who has responsibility for compensation practices? The Library Board has chosen to follow Metro's lead in negotiating the wage portion of the collective agreements. Therefore, the compensation practicesforlibraryworkersaredeterminedbythepatternsetbyMetro. It is the Library that attaches the value to a job based on its skill, effort, responsibility and working conditions, but changes in classification, and therefore in pay, are subject to review and approval by Metro. The labour relations reality is that whereas the Library Board is freeto negotiatethe wagesand benefitswiththe Union, ithasalways chosen

to follow the Metro settlements. In reality, it is Metro who most heavily influences, and therefore has the responsibility for, the compensation practices at the Library.

2 What is the nature of the business, the service, or the enterprise? On a day-to-day basis, the Library employees look to the Library Board as their employer. Public library services are a core activity of a municipality (Municipal Act R.S.O. 1980 c.302 as amended, s.208 46(a)(ii) and the Public Libraries Act, 1984). The Municipality of Metropolitan Act requires Metro to fund the Library Board as one of theservices Metro must provide. TheLibraryisintegraltoMetroandisnotseverableordispensiblefrom the municipality. The decision as to what library programmes and services are to be undertaken belongs initially with the Library Board, but final approval rests with the Metro politicians as part of the budget process. Moreover the budget process determines how much money will be allocated to these programmes and services. In conclusion, the Library provides an integral service for Metro which is not severable or dispensible from the Metro Corporation.

3 On the basis of the first three criteria, the Tribunal concludes that for pay equity purposes, Metro is the employer of the Library workers. It is the Tribunal's decision that the Library workers are part of theestablishmentofthe MunicipalityofMetropolitanTorontoand thatMetro isthe employerofthe Library workers for the purposes of the Pay Equity Act, 1987.

ORDER

1 The Tribunal revokes the Order of the Review Officer dated June 8, 1989 in this matter.

2 The Tribunal hereby directs the employer, the Municipality of Metropolitan Toronto, and the bargaining agent, the Canadian Union of Public Employees, Local 1582, to negotiate in good faith and endeavour to agree, before the mandatory posting date, on a pay equity plan for the bargaining unit.