Here is a copy of Ontario Bill 8, Public Sector and MPP Accountability and Transparency Act, 2014. Of particular concern is the Broader Public Sector Executive Compensation Act, 2014 (the “Act”).  According to the act, “The purpose of this Act is to manage executive compensation in the broader public sector by authorizing the establishment of compensation frameworks applicable to designated employers and designated executives.”  The act applies to hospitals, boards of education, universities, colleges, other post-secondary institutions, community care access corporations to name a few and also any other board, council, corporation, foundation or organization that is prescribed Ontario government. It does not apply to for-profit corporations. The Act only applies to “designated executives” who make cash compensation of $100,000 or more.  It does not apply to unionized employees.  The Ontario government may provide directives requiring disclosure of salaries, bonuses, incentive plans, allowances, agreements, compensation policies and compensation studies to name but some of the items.  

The most important part of the legislation is that the Lieutenant Governor in Council “may make regulations establishing one or more compensation frameworks governing designated employers and designated executives.”  These frameworks could apply to single employees or classes of employees or all employees or a combination thereof.  The Act notes “A compensation framework may govern the compensation that may be provided by a designated employer to a designated executive and, without limiting the generality of the foregoing, may provide for and limit the compensation and payments and elements of compensation and payments that may be provided to designated executives, including salaries, salary ranges, benefits, perquisites, discretionary and non-discretionary payments, payments payable on or in connection with termination, performance plans, incentive plans, bonus plans, allowances and any other form of remuneration.”

Existing designated executives can receive their compensation before the effective date of the compensation framework if the person continues in the same position even if the compensation is greater than the compensation framework as long as it has been “implemented on or before the effective date” and the “effective date is not defined”. 

Some other points:

  1. Any agreement to pay more than that which is allowed is void and unenforceable to the extent of the conflict;
  2. This Act applies to new hires;
  3. If there is a change in position for a designated executive then the applicable compensation framework must be used;
  4. The Ontario government can appoint a public accountant to audit the records of the employer;
  5. Any breach of this Act is deemed to be a breach of a funding agreement between the employer and the Ontario government;
  6. Any payment in excess of what is authorized is an overpayment and Ontario government can demand payment of that amount;
  7. The employer can go after the employee for the over payment as well;
  8. Rights or entitlement under the Human Rights Code, certain sections of the Employment Standards Act or the Pay Equity Act are not affected by this legislation; and
  9. There is no constructive dismissal when an employer does something pursuant to the Act.  

Here is the explanatory note from the Ontario government:

“The Lieutenant Governor in Council is given the authority to establish compensation frameworks governing the compensation of certain executives in the broader public sector. These frameworks would establish mandatory restrictions on the compensation of executives to which they would apply. The Management Board of Cabinet is given power to obtain information regarding compensation from broader public sector employers.  Once a compensation framework applies to an employer, it and its employees are no longer bound by Part II.1 (Compensation Arrangements) of the Broader Public Sector Accountability Act, 2010.  Methods are established to recover the amounts of overpayments made contrary to the legislation.  Powers to make directives are provided for.”

Here is a link to the page on the Ontario government website with details of Bill 8, Public Sector and MPP Accountability and Transparency Act, 2014.