City of Toronto Violates ESA, Ordered to Pay Employees $5 Million in Back Wages

Politicians these days like to make big promises to cut public sector pay.  It’s politically popular to cast all public sector workers as lazy, overpaid deadweight.   In Toronto, a Mayor got elected in no small measure because of his promise to attack City employees.  Often this narrative is directed at the governments’ unionized workers, but nonunion workers are not exempt.   In 2009, the City of Toronto council (under Mayor Miller) decided they would prefer not to pay some $5 million in  annual bonuses required by the employment contracts of its nonunion, managerial employees.  So the Council canceled the payments.  The employees filed an employment standards complaint.  The employees won, and now the City needs to pay the bonuses.  Here is a Toronto Star piece discussing the decision.
Here is the Employment Standards Officer’s decision
The key to the decision is the fact that “wages” (section 1 definitions) in the Employment Standards Act includes any “monetary remuneration payable by an employer to an employee under the terms of an employment contract, oral or written, express or implied”. In other words, a term of the employment contract requiring payment of a bonus becomes enforceable under the ESA, since Section 11 requires employers to pay “all wages” to employees.
The manager’s contracts included a requirement for the employer to pay a performance bonus of up to 3% for 2008 if employees met some benchmark performance standards for the year, subject to the City approving the budget for that year the bonuses would be paid (2009).  In this case, the employees earned the bonuses for the year 2008, and the Council approved the 2009 budget in March 2009.  Thus, the preconditions in the employment contract for payment of the bonus were satisfied, and the bonuses became due.  The attempt by the City to later (in April 2009) rescind the bonuses was illegal and a breach of the employment contract and the ESA.
In the Star piece, Councillor Peter Milczyn is quoted as follows:  “It was removed after they had earned it, and we knew at the time that it was a problematic decision.”  If the employer knew the decision to cancel the bonuses was problematic, why did they go through with it?  Politics, I presume.  Miller was trying to look like he was taking action on public sector wages, and the decision did manage to defer these costs til now.
Mayor Ford, for all his whining about overpaid City employees, has approved a 2.25% raise for these same managerial employees.  There’s no great secret  why Ford and his gravy-cutting buds on Council are now sucking up to the nonunion City employees.  Next year, when Ford locks out garbage collectors,  child car workers, and other city administrators, guess who will be expected to work ridiculously long hours picking up the slack and answering angry phone calls for “taxpayers”?  You got it:  the nonunion managers.
What do you think employee morale is like at  the City these days?