SUPREME
COURT OF CANADA
Citation: Meredith v. Canada (Attorney General), 2015 SCC 2, [2015]
1 S.C.R. 125
|
Date: 20150116
Docket: 35424
|
Between:
Robert
Meredith and Brian Roach
(representing
all members of the Royal Canadian Mounted Police)
Appellants
and
Attorney
General of Canada
Respondent
- and -
Attorney
General of Ontario, Attorney General of British Columbia,
Attorney
General for Saskatchewan, Attorney General of Alberta,
Canadian
Labour Congress, Professional Institute of the Public Service of Canada,
Canadian Union of Public Employees, Local 675, Public Service Alliance of
Canada, Confédération des syndicats nationaux and Union of Canadian
Correctional Officers
Interveners
Coram: McLachlin C.J. and LeBel, Abella, Rothstein, Cromwell,
Karakatsanis and Wagner JJ.
Joint Reasons
for Judgment:
(paras. 1 to 32)
Reasons
Concurring in the Result:
(paras. 33 to 49)
Dissenting
Reasons:
(paras. 50 to 72)
|
McLachlin C.J. and LeBel J. (Cromwell,
Karakatsanis and Wagner JJ. concurring)
Rothstein J.
Abella J.
|
meredith v.
canada (attorney general), 2015
SCC 2, [2015] 1 S.C.R. 125
Robert Meredith and
Brian Roach (representing all members of
the Royal Canadian Mounted
Police) Appellants
v.
Attorney General of Canada Respondent
and
Attorney General of Ontario,
Attorney General of British Columbia,
Attorney General for Saskatchewan,
Attorney General of Alberta,
Canadian Labour Congress,
Professional Institute of the Public
Service of Canada,
Canadian Union of Public Employees,
Local 675,
Public Service Alliance of Canada,
Confédération des syndicats nationaux
and
Union of Canadian Correctional
Officers Interveners
Indexed as: Meredith v. Canada (Attorney General)
2015 SCC 2
File No.: 35424.
2014: February 19; 2015: January 16.
Present: McLachlin C.J. and LeBel, Abella, Rothstein, Cromwell,
Karakatsanis and Wagner JJ.
on appeal from the federal court of appeal
Constitutional
law — Charter of Rights — Freedom of association — Right to collective
bargaining — Wage rollback — Statutory limit on wage increases in public sector
— Treasury Board unilaterally reducing previously agreed-upon wage increases
for RCMP members — Federal wage restraint legislation subsequently enacted in
response to global financial crisis, giving statutory effect to Treasury Board
decision with respect to RCMP members — Whether legislation infringes
constitutional guarantee of freedom of association — If so, whether
infringement justifiable — Expenditure Restraint Act, S.C. 2009, c. 2, s. 393 —
Canadian Charter of Rights and Freedoms, ss. 1 , 2 (d).
The
Treasury Board establishes the pay and allowances paid to members of the RCMP. In
setting their pay, the Treasury Board considers recommendations developed
through the Pay Council, an advisory board composed of representatives of RCMP
management and RCMP members.
In June 2008 and in
response to recommendations initially made by the Pay Council, the Treasury
Board announced salary increases of 3.32%, 3.5% and 2% for RCMP members for the
years 2008 to 2010, as well as increases in certain forms of supplemental
compensation. A government-wide response to a global
financial crisis led the Treasury Board to revisit its decision
concerning RCMP wages for the fiscal years 2008-10. In December 2008, the
Treasury Board communicated to the RCMP Commissioner a revised wage decision
providing for salary increases of 1.5% in each of 2008, 2009 and 2010, in line
with limits previously announced for the whole of the public sector. Members
of the Staff Relations Representative Program’s (“SRRP”) National Executive
Committee and the Pay Council approached Treasury Board officials and members
of Cabinet to discuss the wage rollback. All of their proposals for change
were rejected.
Finally, in March
2009, the Expenditure Restraint Act, S.C. 2009, c. 2, s. 393 (“ERA ”),
was enacted, imposing a limit of 1.5% on wage increases in the public sector
for the 2008 to 2010 fiscal years. The ERA also prohibited any other
increases to compensation but contained an exception for RCMP members
permitting the negotiation of additional allowances as part of transformational
initiatives within the RCMP.
M and R, who are
members of the National Executive Committee of the SRRP, brought a
constitutional challenge on behalf of all members of the RCMP, arguing that the
December 2008 decision of the Treasury Board and the ERA violate the
constitutional right to collective bargaining protected by s. 2 (d) of
the Charter by rolling back scheduled wage increases for RCMP members
without prior consultation. They did not, however, challenge
the constitutionality of the RCMP labour relations process.
A judge of the
Federal Court declared that both the Treasury Board’s December
2008 decision and the impugned provisions of the ERA violated s. 2 (d)
of the Charter . The judge found that the Pay Council was the only
formal means by which RCMP members could collectively pursue goals relating to
remuneration with the Treasury Board and that the Treasury
Board’s decision and the subsequently enacted ERA made it effectively
impossible for the Pay Council to make representations on behalf of members of
the RCMP and to have those representations considered in good faith. Neither
violation was found to be saved by s. 1 of the Charter .
The Federal Court of Appeal disagreed. Having found
that the ERA gave statutory effect to the Treasury Board’s December 2008
decision, and that it was the constitutionality of that Act which was truly at
issue, the Court of Appeal found that the ERA did not violate the
freedom of association of RCMP members. It allowed the appeal.
Held (Abella
J. dissenting): The appeal should be dismissed. The ERA
does not infringe s. 2 (d) of the Charter . Rolling back scheduled
wage increases for RCMP members without prior consultation does not infringe
their constitutional right to collective bargaining.
Per
McLachlin C.J. and LeBel, Cromwell, Karakatsanis and Wagner JJ.: For
the reasons given in the companion case, Mounted Police Association of
Ontario v. Canada (Attorney General), 2015 SCC 1, [2015] 1 S.C.R. 3 (“MPAO”),
s. 2 (d) of the Charter protects RCMP
members’ freedom to associate and pursue their workplace goals through collective
bargaining. In the absence of a true collective bargaining process, RCMP
members used the Pay Council to develop recommendations for members’ pay and to
advance their compensation-related goals. The Charter protects that
associational activity, even though the Pay Council process is part of the
scheme found to be constitutionally inadequate in MPAO. Despite the
deficiencies in the Pay Council process, it nonetheless constitutes
associational activity that attracts Charter protection.
Interference
with a constitutionally inadequate labour relations process may attract
scrutiny under s. 2 (d). However, in this case,
the ERA did not substantially interfere with the process so as to
infringe RCMP members’ freedom of association. The limits imposed by the ERA
were shared by all public servants, were consistent with the going rate reached
in agreements concluded elsewhere in the core public administration and did not
preclude consultation on other compensation-related issues, either in the past
or the future. Furthermore, the ERA did not prevent the consultation
process from moving forward. An exception for RCMP members included in the ERA
allowed RCMP members to obtain significant benefits as a result of
subsequent proposals brought forward through the existing Pay Council process. Actual
outcomes are not determinative of a s. 2 (d)
analysis, but, in this case, the evidence of outcomes supports a conclusion
that the impact of the enactment of the ERA on the associational
activity of RCMP members was minor.
Simply
put, the Pay Council continued to afford RCMP members a process for
consultation on compensation-related issues within the constitutionally
inadequate labour relations scheme that was then in place. The ERA and
the government’s course of conduct cannot be said to have substantially
impaired the collective pursuit of the workplace goals of RCMP members. It is
therefore unnecessary to comment on the application of s. 1 of the Charter .
Per
Rothstein J.: There is agreement with the majority that there was no s.
2 (d) violation in this case. However, the majority in MPAO
made no findings with regard to the Pay Council process and the
constitutionality of that process has not been challenged in this appeal. Accordingly,
it must be assumed to be Charter compliant for the purposes of this
appeal.
The
December 2008 decision rolling back RCMP members’ previously agreed-to wage
increases was an interim measure designed to ensure that the RCMP’s scheduled
wage increases would not come into effect before wage restraint legislation
could be enacted. That decision was subsequently overridden by the enactment
of the ERA . It is therefore the validity of the ERA that is at
issue here and the correct framework to analyse its validity is to ask whether
the Act rendered meaningful collective bargaining for RCMP members, via the Pay
Council process, effectively impossible.
The
facts of this case unfolded in the midst of the 2008 global financial crisis.
Though not determinative, this context is relevant to the inquiry into the
adequacy of the government’s consultation with the Pay Council. That context
does not excuse the government’s failure to consult before the December 2008
decision, but it helps us to understand the manner in which the process leading
to the enactment of the ERA unfolded.
A
contextual approach in this case requires an examination of the impact of the ERA
on the ability of the Pay Council to engage in good faith exchanges with RCMP
management. The ERA did place limits on the wage increases of RCMP
members for three fiscal years. However, it did not completely restrict all
compensation increases and it did not make collective bargaining effectively
impossible for RCMP members. While the ERA precluded negotiations on
the issue of wages for a limited period of time, there were other areas in
which the members could see their compensation increase. And, pursuant to s. 62
of the ERA , members were able to negotiate an allowance increase for
themselves. Although results of collective bargaining are not guaranteed under
s. 2 (d) of the Charter , the fact that such allowances were
approved in a period of serious budgetary restraint is an important contextual
factor in evaluating whether the ERA made collective bargaining
effectively impossible for RCMP members.
After
the December 2008 decision, members of the Pay Council and SRRP had several
opportunities to meet with government representatives about the yet-to-be
enacted ERA . These meetings constituted good faith and meaningful
consultation that remedied the government’s earlier failure to consult RCMP
members. Government representatives demonstrated an openness to negotiate on
compensation issues and to engage with the members.
The
constitutionality of the ERA rests on whether its provisions make
collective bargaining between the government and RCMP members effectively
impossible, not on the manner in which the law was enacted. The restriction on
wage increases imposed by the ERA was undoubtedly not the result that
RCMP members hoped for. But so long as good faith consultation took place,
their dissatisfaction with the result has no bearing on the constitutional analysis.
The ERA did not make meaningful collective bargaining effectively
impossible.
Per
Abella J. (dissenting): The federal government’s unilateral decision to
roll back the agreed-upon RCMP pay increases through the ERA was
unconstitutional. The increases themselves were the result of an extensive
consultation process with the RCMP. The absence of any meaningful opportunity
for the RCMP to make representations about the extent and impact of the
rollbacks had the effect of completely nullifying the right to a meaningful
consultation process. This conduct was precisely what led this Court, in Health
Services and Support — Facilities Subsector Bargaining Assn. v. British
Columbia, [2007] 2 S.C.R. 391, to find an unjustified infringement of s. 2 (d).
An
employer cannot unilaterally reduce employees’ wages, and must give them an
opportunity to make meaningful representations. The
unilateral rollback of the RCMP’s agreed-upon wage increases without any such
prior consultation is a substantial interference with the bargaining process. The
fact that the rollbacks were for a three-year period and did not preclude
discussion on some other issues did not diminish the severity of the breach.
This
breach does not survive the s. 1 proportionality analysis. The government’s
articulated objectives for the ERA were to reduce wage pressure in the
private sector, to demonstrate leadership by showing economic restraint in the
use of public funds and to manage public sector wage costs to ensure fiscal
stability. Even in the midst of a fiscal crisis, however, there are limits on
the extent to which the government can restrain public sector wages that are
the subject of collective agreements.
While
wage rollbacks may technically be seen to be rationally connected to fiscal
stability and responsibility, the refusal to engage in any meaningful form of
consultation is not. Treasury Board consulted directly with all 17 bargaining
agents of the core public service before the ERA was enacted. There is
nothing in the record to explain what made the RCMP singularly ineligible for
discussions about whether or how to roll back its agreed-upon wage package, or
how refusing to engage in such discussions furthered the government’s ability
to address its fiscal concerns.
But
even if rationally connected, the unilateral rollback cannot be said to be
minimally impairing. Because meaningful consultation took place with almost
every other bargaining agent in the core public service, it is clear that less
infringing options than a complete absence of negotiations were available to
the government. The breach of s. 2 (d) cannot therefore be justified
under s. 1 .
Cases Cited
By McLachlin C.J. and LeBel J.
Referred
to: Health Services and Support — Facilities Subsector Bargaining Assn.
v. British Columbia, 2007 SCC 27, [2007] 2 S.C.R. 391; Mounted Police
Association of Ontario v. Canada (Attorney General), 2015 SCC 1, [2015] 1
S.C.R. 3.
By Rothstein J.
Referred
to: Mounted Police Association of Ontario v. Canada (Attorney General),
2015 SCC 1, [2015] 1 S.C.R. 3; Health Services and Support — Facilities
Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, [2007] 2
S.C.R. 391; Ontario (Attorney General) v. Fraser, 2011 SCC 20, [2011] 2
S.C.R. 3; Canada (House of Commons) v. Vaid, 2005 SCC 30, [2005] 1
S.C.R. 667; New Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the
House of Assembly), [1993] 1 S.C.R. 319.
By Abella J. (dissenting)
Health
Services and Support — Facilities Subsector Bargaining Assn. v. British
Columbia, 2007 SCC 27, [2007] 2 S.C.R. 391; Reference re Public Service
Employee Relations Act (Alta.), [1987] 1 S.C.R. 313; Re British Columbia
Railway Co. and General Truck Drivers and Helpers Union, Local No. 31, Board
of Arbitration, Vancouver, June 1, 1976; Workplace Health, Safety and
Compensation Commission (Re), [2005] N.B.L.E.B.D. No. 60 (QL); Re Canadian
Union of Public Employees and Province of New Brunswick (1982), 49 N.B.R.
(2d) 31; Halifax (Regional Municipality) and I.A.F.F., Loc. 268 (Re) (1998),
71 L.A.C. (4th) 129; New Brunswick (Board of Management) (Re), [2004]
N.B.L.E.B.D. No. 36 (QL); New Brunswick (Board of Management) (Re),
[2004] N.B.L.E.B.D. No. 24 (QL); New Brunswick (Board of Management) (Re),
[2011] N.B.L.E.B.D. No. 12 (QL); New Brunswick (Board of Management) and N.B.U.P.P.E.
(2010), 184 C.L.R.B.R. (2d) 72; New Brunswick (Board of Management) v.
N.B.U.P.P.E., 2006 CarswellNB 332 (WL Can.); Prince Edward Island (Department
of Health & Wellness) v. P.E.I.U.P.S.E., 2010 CarswellPEI 78 (WL Can.);
N.B.T.F. v. New Brunswick (Board of Management), 2004 CarswellNB 653 (WL
Can.); RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R.
199.
Statutes and Regulations Cited
Bill C-10, An Act to implement certain provisions of the budget tabled
in Parliament on January 27, 2009 and related fiscal measures, 2nd Sess., 40th
Parl., cl. 393, s. 62 (first reading).
Budget Implementation Act, 2009 , S.C.
2009, c. 2, s. 393 .
Canadian Charter of Rights and Freedoms,
ss. 1 , 2 (d).
Expenditure Restraint Act, S.C. 2009, c.
2, s. 393, ss. 16 , 35 , 38 , 43 , 44 to 49 , 57 , 62 .
Health and Social Services Delivery Improvement Act, S.B.C. 2002, c. 2, Part 2.
Public Service Labour Relations Act,
S.C. 2003, c. 22 [as en. by Public Service Modernization Act , S.C. 2003,
c. 22, s. 2 ], s. 2(1) “employee”.
Royal Canadian Mounted Police Act,
R.S.C. 1985, c. R-10, s. 22(1) .
Authors Cited
Canada. Minister of Finance. Protecting Canada’s Future: Economic
and Fiscal Statement, November 27, 2008. Ottawa: Department of Finance,
2008.
Corry, David J. Collective Bargaining and Agreement, vol. 2,
Collective Agreement Annotated. Toronto: Canada Law Book, 1997 (loose-leaf
updated March 2014, release 19).
International Labour Office. Collective bargaining in the public
service: A way forward. International Labour Conference, 102nd Sess.,
Report III (Part 1B). Geneva: The Office, 2013.
International Labour Organization. Freedom of Association: Digest
of decisions and principles of the Freedom of Association Committee of the
Governing Body of the ILO, 5th (rev.) ed. Geneva: International Labour
Office, 2006.
APPEAL
from a judgment of the Federal Court of Appeal (Nadon, Dawson and Trudel JJ.A.),
2013 FCA 112, 444 N.R. 129, 360 D.L.R. (4th) 352, 280 C.R.R. (2d) 158, 2013
CLLC ¶220-034, [2013] F.C.J. No. 465 (QL), 2013 CarswellNat 1114 (WL Can.),
setting aside a decision of Heneghan J., 2011 FC 735, 392 F.T.R. 25, 240 C.R.R.
(2d) 204, [2011] F.C.J. No. 948 (QL), 2011 CarswellNat 2356 (WL Can.). Appeal dismissed,
Abella J. dissenting.
Christopher
Rootham and Alison McEwen, for the appellants.
Peter
Southey, Donnaree Nygard and J. Sanderson
Graham, for the respondent.
Robin
K. Basu and Michael S. Dunn, for the
intervener the Attorney General of Ontario.
Karen
Horsman, Jonathan Penner and Keith Evans,
for the intervener the Attorney General of British Columbia.
Graeme
G. Mitchell, Q.C., for the intervener the Attorney
General for Saskatchewan.
Roderick
S. Wiltshire, for the intervener the Attorney
General of Alberta.
Steven
Barrett and Ethan Poskanzer, for the
intervener the Canadian Labour Congress.
Fay
Faraday, for the intervener the Professional
Institute of the Public Service of Canada.
Annick
Desjardins, for the intervener the Canadian Union
of Public Employees, Local 675.
Andrew
Raven, Andrew Astritis and Morgan Rowe,
for the intervener the Public Service Alliance of Canada.
Éric
Lévesque, for the interveners Confédération des
syndicats nationaux and the Union of Canadian Correctional Officers.
The
judgment of McLachlin C.J. and LeBel, Cromwell, Karakatsanis and Wagner JJ. was
delivered by
The Chief Justice and
LeBel J. —
I.
Introduction
[1]
This appeal raises the question whether the Expenditure
Restraint Act, S.C. 2009, c. 2, s. 393 (“ERA ”), violates the
guarantee of freedom of association in s. 2 (d) of the Canadian
Charter of Rights and Freedoms , and if so, whether the infringement is
justified under s. 1 . The appellants are serving members of the Royal Canadian
Mounted Police (“RCMP”) who were elected to the national executive of the Staff
Relations Representative Program (“SRRP”). They argue that the ERA , by
rolling back scheduled wage increases for RCMP members without prior
consultation, violates the members’ constitutional right to collective bargaining, as recognized in Health Services and
Support — Facilities Subsector Bargaining Assn. v. British Columbia, 2007
SCC 27, [2007] 2 S.C.R. 391.
[2]
This case was heard together with a related
appeal challenging the constitutionality of the RCMP labour relations regime,
which prohibits RCMP members from bargaining through an independent union or
employee association: Mounted Police Association of Ontario v. Canada
(Attorney General), 2015 SCC 1, [2015] 1 S.C.R. 3 (“MPAO”). In the companion case, we affirm and explain the
protection afforded to collective bargaining by the freedom of association set
out at s. 2 (d) of the Charter .
[3]
In MPAO, we have concluded that the
imposition of the SRRP, combined with a prohibition on collective bargaining by
RCMP members, infringes s. 2 (d) and is not saved under s. 1 . As stated
at para. 9 of our reasons in that case, the SRRP is the “core component” of the
labour relations system currently in place at the RCMP, though it is
complemented by two other bodies — the Pay Council and the Mounted Police
Members’ Legal Fund, a non-profit corporation funded through membership dues
that provides legal assistance to RCMP members on employment-related issues.
As detailed below, the Pay Council process depends on the existence of the SRRP
and therefore cannot survive (at least in its current form) the conclusion in MPAO
that the SRRP, within the existing RCMP labour relations system,
unconstitutionally impairs the s. 2 (d) rights of RCMP members. The Pay
Council process is part of the scheme found to be constitutionally inadequate
in MPAO.
[4]
This creates difficulties in the present appeal,
as we must determine whether s. 2 (d) can apply in the absence of a
constitutionally adequate process of collective bargaining. The appellants do
not challenge the constitutionality of the Pay Council process in these
proceedings; they take no position on that issue as it arises in MPAO.
In our view, despite the deficiencies in the Pay Council process, it
nonetheless constitutes associational activity that attracts Charter protection.
The question to be determined on this appeal is whether the ERA amounted
to substantial interference with that activity despite its constitutional
deficiencies. We conclude that it did not and would dismiss the appeal.
II.
Background
A.
The Pay Council
[5]
The definition of “employee” in s. 2(1) of the Public
Service Labour Relations Act (“PSLRA”), enacted by the Public
Service Modernization Act , S.C. 2003, c. 22, s. 2 , excludes RCMP members
from the labour relations regime governed by the PSLRA. They are not
permitted to unionize or attempt to bargain collectively. The Royal
Canadian Mounted Police Act, R.S.C. 1985, c. R-10, s. 22(1) , provides that
the Treasury Board shall establish the pay and allowances paid to members of
the RCMP. The Treasury Board is a committee of the federal Cabinet and deals
with public sector unions and employee representatives through intermediaries.
In the case of RCMP members, the relevant intermediaries are the Minister of
Public Safety and Emergency Preparedness (the “Minister”) and the RCMP
Commissioner. In setting members’ pay, the Treasury Board responds to requests
from the Minister, who, in turn, acts on recommendations received from the RCMP
Commissioner. These recommendations are developed through an advisory board
called the Pay Council.
[6]
The Pay Council is a committee established by
the RCMP Commissioner in 1996. It has no legislative basis. The Pay Council
consists of five members: two representatives of management, two representatives
of RCMP members, and a neutral chairperson appointed by the Commissioner. Of
the two members’ representatives, one is the Chair of the SRRP’s Pay and
Benefits Committee, and the other is an external compensation consultant
appointed by the Commissioner on the advice of the SRRP National Executive
Committee. The structure and operation of the SRRP is considered more fully in
MPAO, released concurrently.
B.
The ERA and Its Impact on RCMP Wage Levels
[7]
The Pay Council develops its recommendations for
RCMP members’ pay and benefits with reference to a comparator group of eight
Canadian police forces. The Pay Council aims to provide compensation placing
the RCMP near the average of the top three comparator police forces. The
anticipated wage increases at issue on this appeal were first discussed in 2007
and cover the years 2008, 2009 and 2010. The Pay Council’s recommendations for
those years were forwarded to the Commissioner and, subsequently, to the
Minister and the Treasury Board. On June 26, 2008, the Treasury Board
announced salary increases of 3.32%, 3.5% and 2% for 2008-10. Certain
supplemental compensation was also increased: a doubling of service pay (an
annual lump sum payment based on years of service) and an increase in the Field
Trainer Allowance. These pay levels would have placed total compensation
within the Pay Council’s target range, the average compensation of the top
three Canadian comparator police forces.
[8]
According to the respondent, a change in
economic circumstances led the government to revisit these increases. The
collapse of the U.S. housing market in the summer of 2007 resulted in a global
financial crisis that reached its peak in the fall of 2008. As is well known,
this crisis included the bankruptcy of the American investment bank Lehman
Brothers and the near-collapse of other significant financial institutions.
Projections of gross domestic product growth fell dramatically, and
unemployment in Canada rose sharply in November 2008.
[9]
The Minister of Finance, Hon. James M. Flaherty,
delivered an economic and fiscal statement on November 27, 2008 (Protecting
Canada’s Future: Economic and Fiscal Statement, November 27, 2008 (2008)
(“Statement”)). The Statement projected budget deficits for
fiscal years 2009-10, 2010-11 and 2011-12, and proposed wide-ranging economic
measures intended to stabilize the financial system and enhance credit
availability to Canadian businesses affected by the global credit crisis. At
the same time, the government implemented a review of public spending,
including public sector wages and salaries. As a result, the Treasury Board
Secretariat recommended limiting spending on compensation. Where collective
bargaining was underway, the Treasury Board Secretariat provided its
negotiators with a mandate to bargain within certain wage increase limits. The
Statement announced the government’s intention to introduce wage
restraint legislation — to limit or roll back wage increases for the public
sector to 2.3% for 2007-8, and 1.5% for 2008-10 (p. 10).
[10]
On December 4, 2008, the Governor General
prorogued Parliament. Accordingly, the announced wage restraint legislation —
the ERA — could not be introduced until early 2009. On December 11,
2008, however, the Treasury Board revisited its decision concerning RCMP wages
for the fiscal years 2008-10. It communicated to the RCMP Commissioner a
revised wage decision providing for salary increases of 1.5% in each of 2008,
2009 and 2010, in line with limits previously announced for the public sector.
[11]
Members of the SRRP’s National Executive
Committee and the Pay Council approached Treasury Board officials and members
of Cabinet to discuss the wage rollback. The appellants met with the Minister
of Public Safety, Hon. Peter Van Loan, on January 27, 2009 and February 2,
2009, and with the President of the Treasury Board, Hon. Vic Toews, on February
5, 2009. On February 11, 2009, the Pay Council presented the President of the
Treasury Board with a package of recommendations concerning the announced
rollback, but this proposal was rejected as inconsistent with the ERA .
[12]
The ERA was enacted by s. 393 of the Budget
Implementation Act, 2009, S.C. 2009, c. 2 , which was tabled in the House of
Commons on February 6, 2009, and received Royal Assent on March 12, 2009.
Section 16 of the ERA imposed the following limits on wage increases in
the public sector:
16. Despite any collective
agreement, arbitral award or terms and conditions of employment to the
contrary, but subject to the other provisions of this Act, the rates of pay for
employees are to be increased, or are deemed to have been increased, as the
case may be, by the following percentages for any 12-month period that begins
during any of the following fiscal years:
(a)
the 2006–2007 fiscal year, 2.5%;
(b)
the 2007–2008 fiscal year, 2.3%;
(c)
the 2008–2009 fiscal year, 1.5%;
(d)
the 2009–2010 fiscal year, 1.5%; and
(e)
the 2010–2011 fiscal year, 1.5%.
[13]
The ERA prohibited any other increases to
compensation. Any terms or conditions providing for such increases, for a
period beginning December 8, 2008 and ending March 31, 2011, were of no effect
pursuant to ss. 44 to 49 . However, the ERA contained an exception for
RCMP members:
62. Despite sections 44 to 49, the Treasury Board may change the amount
or rate of any allowance, or make any new allowance, applicable to members of
the Royal Canadian Mounted Police if the Treasury Board is of the opinion that
the change or the new allowance, as the case may be, is critical to support
transformation initiatives relating to the Royal Canadian Mounted Police.
[14]
On June 9, 2009, pursuant to s. 62 , the Treasury
Board approved compensation increases for RCMP members. A new policy was
implemented increasing compensation for off-duty members required to be
available for work. Service pay was also increased from 1% to 1.5% for every
five years of service and extended, for the first time, to certain civilian
members. The service pay increase had been first proposed by the Pay Council,
in its February 11, 2009 recommendations to the Treasury Board.
III.
Judicial History
A.
Federal Court, 2011 FC 735, 392 F.T.R. 25
[15]
The application judge, Heneghan J., allowed the
application for judicial review of the Treasury Board’s December 11, 2008
decision. She also declared that both the decision and ss. 16 , 35 , 38 , 43 , 46
and 49 of the ERA violated s. 2 (d) of the Charter , and
that neither violation was saved by s. 1 .
[16]
Heneghan J. found that the Pay Council was “the
only formal means through which Members of the RCMP [could] collectively pursue
goals relating to remuneration with their employer, . . . the
Treasury Board” (para. 72). She concluded that the Treasury Board’s 2008
decision and the subsequently enacted ERA made it effectively impossible
for the Pay Council to make representations on behalf of members of the RCMP
and to have those representations considered in good faith. The unilateral
cancellation of the previous pay and benefits agreement was found to be a
substantial interference with the right protected by s. 2 (d) of the Charter .
Given that the cancellation of the pay increases would have lasting effects on
pension amounts and future wage increases, the trial judge held that the impact
of the ERA was permanent.
[17]
Turning to her s. 1 Charter analysis, the
trial judge held that some of the stated aims of the Treasury Board’s decision
— such as providing leadership, showing restraint and demonstrating respect for
public funds in a time of financial crisis — were political in nature and were
not pressing and substantial. She went on to find that the Attorney General of
Canada had not provided persuasive and cogent evidence to show a rational
connection between the reduction of wage increases of RCMP members and the
stated aims of reducing upward pressure on private sector wages in a time of
economic turmoil, providing leadership and demonstrating restraint with public
funds. On the issue of minimal impairment, the judge held that the impairment
to be considered was not the financial impact to members of the RCMP but the
impairment of the s. 2 (d) Charter right, particularly of the Pay
Council process. Noting that the Treasury Board had taken the time to consult
17 bargaining agents and that it, along with separate government agencies, had
succeeded in signing upwards of 40 agreements with bargaining agents inside and
outside of the core public administration, the application judge found the
Treasury Board’s unilateral action and disregard for the Pay Council process to
be not minimally impairing. Finally, the trial judge found that the only
substantiated benefit — saving the Treasury Board an undisclosed amount of
money — did not outweigh the detrimental effects of the ERA .
B.
Federal Court of Appeal, 2013 FCA 112, 444 N.R.
129
[18]
The Federal Court of Appeal (per Dawson J.A.,
Nadon and Trudel JJ.A. concurring) held that the application judge had
committed an error of law by treating the Treasury Board decision and the ERA
as a single limit on freedom of association and failing to conduct separate
constitutional analyses of each. Having found that the ERA gave
statutory effect to the Treasury Board’s December 2008 decision, the Federal
Court of Appeal conducted a de novo analysis of the constitutionality of
the impugned provisions of the ERA . It found that the ERA did
not violate the appellants’ right of association and allowed the appeal.
[19]
The Federal Court of Appeal identified two
contextual factors relevant to its analysis of the constitutionality of the ERA :
(i) the nature of the associational activity enjoyed by members of the RCMP,
including the fact that the Treasury Board can act unilaterally as it is not
obliged to consult or negotiate with the Pay Council or Staff Relations
Representatives with respect to wages and benefits; and (ii) the purpose of the
ERA and its effect upon members of the RCMP.
[20]
The court concluded that the ERA did not
substantially interfere with the process by which members of the RCMP pursue
their associational activity, as it did not make it impossible for members of
the RCMP to act collectively to achieve workplace goals. Rather, the ERA
merely modified terms and conditions of employment which the Treasury Board was
authorized by law to set. According to the Federal Court of Appeal, the ERA
did not substantially interfere with the existing process by which
associational activity was pursued because that process is one in which members
do not bargain directly with their employer and where the employer, as the
ultimate decision-maker, was authorized to set the terms and conditions of
employment without consultation or negotiation. Furthermore, the Pay Council
continued to exert meaningful influence over certain working conditions other
than pay and benefits, demonstrating that the associational process continued
to function despite the enactment of the ERA . Accordingly, the ERA
did not render the RCMP’s associational process pointless.
[21]
On the issue of the ERA ’s purpose, the
Federal Court of Appeal found that the purpose of the ERA was valid as
part of a series of measures designed to stabilize the economy in a time of
financial crisis. Moreover, the Federal Court of Appeal held that the measures
contained in the ERA did not prohibit or make it substantially
impossible for members of the RCMP to exercise their freedom of association in
the future.
IV.
Issues
[22]
On November 4, 2013, the Chief Justice stated
the following constitutional questions:
1. Do ss. 16, 35, 38, 43, 46 and 49 of the Expenditure Restraint
Act, S.C. 2009, c. 2, s. 393 , infringe s. 2 (d) of the Canadian
Charter of Rights and Freedoms ?
2. If so, is the infringement a reasonable limit prescribed by law
as can be demonstrably justified in a free and democratic society under s. 1 of
the Canadian Charter of Rights and Freedoms ?
[23]
The parties have also raised issues concerning
the constitutionality of the Treasury Board decision of December 11, 2008, and
the appropriate remedy. These issues are rendered moot by our decision in this
case that the impugned provisions of the ERA are constitutionally valid,
and by our decision in MPAO that the SRRP violates s. 2 (d) and
cannot be saved under s. 1 of the Charter .
V.
Analysis
A.
Theoretical Foundations of Section 2 (d)
[24]
For the reasons given in the companion case, MPAO,
s. 2(d) of the Charter protects workers’ freedom to associate and
pursue their workplace goals through collective bargaining. In s. 2(d)
cases, the courts must ask whether state action has substantially impaired the
employees’ collective pursuit of workplace goals. The test applicable to this
question is set out in Health Services.
[25]
Section 2(d) guarantees a right to a
meaningful labour relations process, but it does not guarantee a particular
outcome. What is guaranteed is the right of employees to associate in a
meaningful way in the pursuit of collective workplace goals. In MPAO,
we concluded that the imposition of the SRRP, combined with a prohibition on
collective bargaining by RCMP members, infringes this right. At the same time,
the record here establishes that, in the absence of a true collective
bargaining process, RCMP members used the Pay Council to advance their
compensation-related goals. In our view, the Charter protects that
associational activity, even though the process does not provide all that the Charter
requires. The legal alternatives available are not full collective
bargaining or a total absence of constitutional protection.
Interference with a constitutionally inadequate process may attract scrutiny
under s. 2 (d). Accordingly, we must examine whether the ERA
substantially interfered with the existing Pay Council process, so as to
infringe the appellants’ freedom of association.
B.
Whether the ERA Infringes Section 2(d)
[26]
For the affected RCMP members, the ERA
resulted in a rollback of scheduled wage increases from the previous Pay
Council recommendations accepted by the Treasury Board, from between 2% and 3.5%
to 1.5% in each of 2008, 2009 and 2010. The original increase would also have
doubled service pay and increased the Field Trainer Allowance. Both of these
were also eliminated by the ERA , subject to subsequent negotiations
pursuant to s. 62 of that Act.
[27]
The Attorney General of Canada acknowledges that
wages are an important issue, but notes that the limits imposed by the ERA
were time-limited in nature, were shared by all public servants, and did not
permanently remove the subject of wages from collective bargaining. Accordingly,
he suggests that the importance of the wage restraints does not rise to the
level of a s. 2 (d) violation. For the reasons that follow, we conclude
that s. 2 (d) was not breached.
[28]
The facts of Health Services should not
be understood as a minimum threshold for finding a breach of s. 2(d).
Nonetheless, the comparison between the impugned legislation in that case and
the ERA is instructive. The Health and Social Services Delivery
Improvement Act, S.B.C. 2002, c. 2, Part 2, introduced radical changes to
significant terms covered by collective agreements previously concluded. By
contrast, the level at which the ERA capped wage increases for members
of the RCMP was consistent with the going rate reached in agreements concluded
with other bargaining agents inside and outside of the core public
administration and so reflected an outcome consistent with actual bargaining
processes. The process followed to impose the wage restraints thus did not
disregard the substance of the former procedure. And the ERA did not
preclude consultation on other compensation-related issues, either in the past
or the future.
[29]
Furthermore, the ERA did not prevent the
consultation process from moving forward. Most significantly in the case of
RCMP members, s. 62 permitted the negotiation of additional allowances as part
of “transformation[al] initiatives” within the RCMP. The record indicates that
RCMP members were able to obtain significant benefits as a result of subsequent
proposals brought forward through the existing Pay Council process. Service
pay was increased from 1% to 1.5% for every five years of service —
representing a 50% increase — and extended for the first time to certain
civilian members. A new and more generous policy for stand-by pay was also
approved. Actual outcomes are not determinative of a s. 2 (d) analysis,
but, in this case, the evidence of outcomes supports a conclusion that the
enactment of the ERA had a minor impact on the appellants’ associational
activity.
[30]
Simply put, the Pay Council continued to afford
RCMP members a process for consultation on compensation-related issues within
the constitutionally inadequate labour relations framework that was then in
place. The ERA and the government’s course of conduct cannot be said to
have substantially impaired the collective pursuit of the workplace goals of
RCMP members. This said, our conclusions, as they relate to the ERA ’s
impact on the Pay Council process, should not be taken to endorse the constitutional
validity of that process or of similar schemes.
VI.
Justification
[31]
In view of our conclusion on the s. 2(d)
question, we need not determine whether any infringement in this case is a
reasonable limit justified in a free and democratic society. We will not
comment on the application of s. 1 of the Charter .
VII. Conclusion
[32]
We would dismiss the appeal, with costs to the
respondent throughout, and answer the constitutional questions as follows:
1. Do ss. 16, 35, 38, 43, 46 and
49 of the Expenditure Restraint Act, S.C. 2009, c. 2, s. 393 , infringe
s. 2 (d) of the Canadian Charter of Rights and Freedoms ?
No.
2. If so, is the infringement a
reasonable limit prescribed by law as can be demonstrably justified in a free
and democratic society under s. 1 of the Canadian Charter of Rights and
Freedoms ?
It is not necessary to answer the question.
The
following are the reasons delivered by
Rothstein J. —
I.
Introduction
[33]
I concur with the majority’s disposition of this
appeal. However, as their reasons apply the analytical framework of the
majority reasons in the companion case of Mounted Police Association of
Ontario v. Canada (Attorney General), 2015 SCC 1, [2015] 1 S.C.R. 3 (“MPAO”),
in which I have dissented, I now issue separate reasons. The correct framework
to analyse this case is to ask whether the Expenditure Restraint Act,
S.C. 2009, c. 2, s. 393 (“ERA ”), rendered meaningful collective
bargaining for RCMP members, via the Pay Council process, effectively
impossible. As meaningful collective bargaining occurred and the ERA did
not preclude negotiations in the future, there is no violation of s. 2 (d)
of the Canadian Charter of Rights and Freedoms .
II.
Facts and Judicial History
[34]
I accept the majority’s summary of the facts and
judicial history. Any departures or additions are in the analysis below.
III.
Analysis
A.
The Effective Impossibility Test
[35]
In Health Services and Support — Facilities
Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, [2007] 2
S.C.R. 391, this Court found that s. 2 (d) encompasses a right to
collective bargaining that “requires both employer and employees to meet and to
bargain in good faith, in the pursuit of a common goal of peaceful and
productive accommodation” (para. 90). The majority of the Court affirmed this
conclusion in Ontario (Attorney General) v. Fraser, 2011 SCC 20,
[2011] 2 S.C.R. 3, and set out the test for finding an infringement of s. 2 (d)
of the Charter in the labour relations context: “. . . whether the
impugned law or state action has the effect of making it impossible to act
collectively to achieve workplace goals” (para. 46). Collective
bargaining is protected, but only “in the minimal sense of
good faith exchanges” (Fraser, at para. 90). An infringement of s. 2 (d)
will be found where employees or employee representatives can demonstrate that
government action or legislation makes it effectively impossible to make collective
representations and to have management consider these representations in good
faith (Fraser, at para. 98).
B.
The Relevant Inquiry Is Into the Validity of the
ERA
[36]
There is some debate between the parties to this
appeal as to the relevant time period to consider when determining whether
there was a s. 2 (d) breach in the present case. That debate has focused
on the timing and degree of consultation between the Treasury Board and the RCMP’s
Pay Council, a body designed to resolve pay and benefits issues with a
cooperative and consultative approach. The Attorney General of Canada maintains
that the validity of the ERA is what is ultimately at issue and that any
consultation which occurred prior to its adoption by Parliament is relevant.
The appellants, on the other hand, argue that the crucial period for
determining whether there was an infringement of their rights under s. 2 (d)
of the Charter was before December 11, 2008, when the Treasury Board
made its decision modifying the previously agreed-upon wage increases for RCMP
members (the “December 11 Decision”). Specifically, they say that meaningful
consultation should have occurred between November 17, 2008 (when officials
from the Treasury Board Secretariat met with the Commissioner of the RCMP about
the wage increase limits to urge him to meet with the Pay Council) and the
December 11 Decision. The appellants argue that the ERA , which was
introduced in the House of Commons on February 6, 2009, and received Royal
Assent on March 12, 2009, was merely a codification of the December 11 Decision.
[37]
The appellants’ argument does not stand up to
scrutiny. The December 11 Decision was an interim measure. It was designed, in
light of the Governor General’s December 4, 2008 prorogation of Parliament, to
ensure that the RCMP’s previously agreed-to wage increases would not come into
effect in January 2009, only to be rolled back a few months later when the ERA
was brought into force. Even if the December 11 Decision had been made with
appropriate consultation, it was overridden by the enactment of the ERA .
It is therefore the validity of the ERA that is at stake here and any
consultations having occurred prior to its enactment are relevant to the s. 2 (d)
analysis.
C.
The ERA Does Not Infringe Section 2(d) of the
Charter
(1)
The Pay Council Process Must Be Assumed to Be Constitutionally
Compliant
[38]
The majority in MPAO found that the Staff
Relations Representative Program (“SRRP”) did not meet the requirements of s.
2 (d) of the Charter . However, it made no findings with regard to
the Pay Council process, and the appellants have not challenged the
constitutionality of that process in this case. Respectfully, I cannot agree
with the majority’s finding that the Pay Council process “does not provide all
that the Charter requires” (para. 25) when the constitutional questions
stated by the Chief Justice in this appeal do not deal with this issue. The
appropriate analysis is that since the Pay Council process itself is not
challenged, it must be assumed to be constitutionally compliant. In any event,
there is no reason to believe, on the evidence as presented, that the Pay
Council process renders meaningful collective bargaining effectively impossible
for RCMP members.
(2)
Sufficient Consultation After December 11, 2008
[39]
The Attorney General of Canada conceded that
there was no consultation with the Pay Council prior to the December 11 Decision
limiting wage increases for RCMP members. At the hearing, counsel for Messrs. Meredith
and Roach conceded that the government may rehabilitate any deficiency in the
consultation process up until the time that the legislation receives Royal
Assent. The question is thus whether the government subsequently remedied its
failure to consult prior to the December 11 Decision by engaging in meaningful
and good faith consultation with members of the Pay Council between December 11,
2008 and the enactment of the ERA on March 12, 2009.
[40]
In assessing whether the consultations that took
place after December 11, 2008 satisfied the requirements of the derivative
right to collective bargaining under s. 2 (d) of the Charter , this
Court should adopt a broad, contextual approach, as advocated in Health
Services (para. 92). The facts of this case unfolded in the midst of the
2008 global financial crisis. Though not determinative, this context is
relevant to the inquiry into the adequacy of the government’s consultation with
the Pay Council. The context of the financial crisis does not excuse the
government’s failure to consult before the December 11 Decision, but the
existence of those exigent circumstances helps us to understand the
circumstances in which the process leading to the ERA unfolded.
[41]
A contextual approach in this case requires an
examination of the impact of the ERA on the ability of the Pay Council
to engage in good faith exchanges with RCMP management. The ERA did
place limits on RCMP members’ wage increases for three fiscal years, until
2011. However, it did not completely restrict all compensation increases and it
did not make collective bargaining effectively impossible for RCMP members.
[42]
While the freeze on wage increases precluded
negotiations on that issue for a limited period of time, there were other areas
in which the members could see their compensation increase (see ERA, s.
62 ). And RCMP members took advantage of these opportunities to subsequently
negotiate an increase in allowances for members. Although results of collective
bargaining are not guaranteed under s. 2 (d), the fact that such
allowances were approved in a period of serious budgetary restraint is an
important contextual factor in evaluating whether the ERA made
collective bargaining effectively impossible for RCMP members.
[43]
After the December 11 Decision, Messrs. Meredith
and Roach, among others associated with the SRRP and the Pay Council, had
several opportunities to speak with senior government officials about the yet-to-be
introduced ERA . On January 27 and February 2, 2009, they met with the
Honourable Peter Van Loan, then-Minister of Public Safety, to discuss
alternatives to the wage increase restrictions. On February 5, 2009, they met
with the Honourable Vic Toews, then-President of the Treasury Board. Mr. Toews
was not willing to discuss changes to the wage increase limits in the ERA ,
because those limits were being imposed across the public sector. He did,
however, indicate that he was open to discussion on changes to other aspects of
compensation, specifically referencing allowances. When the ERA was
introduced in the House of Commons on February 6, 2009, it included a provision
specific to the RCMP:
62. Despite
sections 44 to 49 [the restraints on public sector wage increases], the
Treasury Board may change the amount or rate of any allowance, or make any new
allowance, applicable to members of the Royal Canadian Mounted Police if the
Treasury Board is of the opinion that the change or the new allowance, as the
case may be, is critical to support transformation initiatives relating to the
Royal Canadian Mounted Police.
(Bill C-10, An Act to implement certain provisions of the budget
tabled in Parliament on January 27, 2009 and related fiscal measures, 2nd
Sess., 40th Parl., cl. 393 (first reading))
Messrs. Meredith and
Roach, along with other Staff Relations Representatives, met with the RCMP Commissioner
on March 3, 2009 to discuss compensation. At a meeting the following day, the
Commissioner instructed the Pay Council to consider how existing allowances
could be increased to advance transformation initiatives for the RCMP, in
conformity with s. 62 of the ERA .
[44]
These meetings constituted good faith and
meaningful consultation that remedied the government’s earlier failure to
consult members of the RCMP. Government representatives demonstrated an
openness to negotiate on compensation issues and to engage with the RCMP
members’ representatives. And, pursuant to s. 62 of the ERA , the
appellants were able to secure a service pay increase from 1% to 1.5% for every
five years of service (2011 FC 735, 392 F.T.R. 25, at para. 47).
[45]
This Court has never recognized a duty on
legislatures to consult with any affected individual or group before enacting
legislation, even where a measure impacts constitutional rights (see Health Services,
at para. 157). Under the doctrine of parliamentary privilege, legislatures’
internal procedures are their own and are not for the judiciary to dictate (see
Canada (House of Commons) v. Vaid, 2005 SCC 30, [2005] 1 S.C.R. 667; New
Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the House of Assembly),
[1993] 1 S.C.R. 319). The constitutionality of the ERA rests on whether
its provisions make collective bargaining between the government and employee
representatives effectively impossible, not on the manner in which the law was
enacted.
[46]
The ERA did not constrain future
collective bargaining by the Pay Council. It is true that s. 57 of the ERA
prevents it from negotiating a backward-looking lump sum payment to compensate
for the difference in wages between the wage increases originally approved in
June 2008 and the limits imposed during the restraint period. However, the fact
that there is nothing in the ERA that overrides the Pay Council’s
process of establishing compensation recommendations in reference to other
police forces suggests that RCMP compensation is likely to remain in step with
that of other police forces.
[47]
As the majority says in MPAO, the fact
that some goals are not ultimately achieved by the association does not mean
that the interests served by collective bargaining have been frustrated: s. 2 (d)
“guarantees a process rather than an outcome” (para. 67). The restriction on
wage increases imposed by the ERA was undoubtedly not the result that
RCMP members and their representatives hoped for. But so long as good faith
consultation took place, their dissatisfaction with the result has no bearing
on the constitutional analysis.
[48]
In sum, the ERA did not render meaningful
collective bargaining effectively impossible for RCMP members. On the contrary,
through meetings with various senior officials and the inclusion of s. 62 in
the ERA , the government had engaged in meaningful consultations with
RCMP members’ representatives and evidenced an openness to continue the
dialogue about compensation in the future. There was no breach of s. 2 (d)
of the Charter .
IV.
Conclusion
[49]
The Pay Council process itself has not been
challenged in this appeal and it must be assumed to be Charter
compliant. I agree with the majority that there was no s. 2 (d) violation
in this case. The ERA did not make meaningful collective bargaining
effectively impossible. There was consultation with RCMP members’
representatives before the ERA received Royal Assent and s. 62 of the ERA
explicitly allowed future negotiations on some issues of compensation. I would
dismiss the appeal with costs.
The
following are the reasons delivered by
[50]
Abella J. (dissenting) — I do not, with great
respect, agree that the federal government’s unilateral decision to roll back
agreed-upon RCMP wage increases through the Expenditure Restraint Act ,
S.C. 2009, c. 2 , is constitutional. These increases were the result of an
extensive consultation process between the RCMP and the government. The absence
of any real opportunity to make representations about the extent and impact of
the rollbacks before they were approved by Treasury Board had the effect of
completely nullifying the right to a meaningful consultation process and
thereby denied members their s. 2 (d) Charter rights. This failure
to consult with the RCMP, particularly when almost every other bargaining agent
in the core public service was consulted, was, in my respectful view, neither
rationally connected to the government’s objective of fiscal stability nor
minimally impairing. It cannot, therefore, be justified under s. 1 .
[51]
The majority concludes that because the
rollbacks applied for a limited three-year period and did not preclude
discussion on some other issues, the impact of the Expenditure Restraint Act
on RCMP members’ s. 2 (d) rights was minor. I see the impact as being far
more significant.
[52]
A measure violates s. 2 (d) of the Canadian
Charter of Rights and Freedoms when it substantially interferes with the
employees’ ability to engage in meaningful associational bargaining activity (Health
Services and Support — Facilities Subsector Bargaining Assn. v. British
Columbia, [2007] 2 S.C.R. 391, at para. 90). Interference is obviously more
likely to be found to be substantial if it relates to an issue that is central
to the collective bargaining process (Health Services, at paras.
95-96).
[53]
Ensuring fair wages is among the key purposes of
collective bargaining. Dickson C.J. explained its salience in his dissent in Reference
re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313, at
p. 368:
The role of association has always
been vital as a means of protecting the essential needs and interests of
working people. Throughout history, workers have associated to overcome their
vulnerability as individuals to the strength of their employers. The capacity
to bargain collectively has long been recognized as one of the integral and
primary functions of associations of working people. While trade unions also
fulfil other important social, political and charitable functions, collective
bargaining remains vital to the capacity of individual employees to participate
in ensuring fair wages, health and safety protections, and equitable and humane
working conditions. [Emphasis added.]
[54]
That is why labour arbitrators have generally
concluded that an employer cannot, no matter how benign its motives,
unilaterally reduce the wages of employees and must meet with the union to
discuss the rollback (David J. Corry, Collective Bargaining and Agreement
(loose-leaf), at pp. 21-9 and 21-11).
[55]
The RCMP wage increases had been agreed to in
June 2008 following a consultation process between the RCMP Pay Council, the
RCMP Commissioner, the Minister responsible for the RCMP and Treasury Board.
The Pay Council was established by the RCMP Commissioner in 1996 and is the
RCMP members’ only mechanism for making representations to management about
compensation issues. The Pay Council’s recommendations are submitted through
the RCMP Commissioner to the Minister of Public Safety and then on to the
employer, Treasury Board.
[56]
The Pay Council process allows for, among other
concerns, the ability to maintain competitive salaries to recruit and retain
officers. The Pay Council recommendations at issue in this case were made in
the spring of 2008 and sought to bring RCMP compensation into the target
compensation range by increasing wages in 2008, 2009 and 2010. The proposed
wage increases were agreed to by the Commissioner and the Minister of Public
Safety, and accepted by Treasury Board. As a result, on June 26, 2008, Treasury
Board announced wage increases at rates of 3.32% for 2008, 3.5% for 2009 and 2%
for 2010, along with an increase in service pay and the Field Trainer
Allowance.
[57]
These increases were never implemented. Instead,
on November 27, 2008, the federal government announced its intention to limit
wage increases in the federal public service. The statutory mechanism for
implementing these limits was the Expenditure Restraint Act , which was
enacted on March 12, 2009. It prohibited not only wage increases greater
than 1.5% for the 2008-11 fiscal years, but also barred future bargaining to
recoup the wages lost during this period. Treasury Board was responsible for
implementing the wage limits.
[58]
Prior to the government’s announcement on November 27, Treasury
Board had consulted with all 17 bargaining agents in the core public
administration with whom it normally negotiated compensation issues. By early December 2008, it had signed 14 new agreements with those
agents.
[59]
In addition, Treasury Board met
throughout November 2008 with the heads of federal agencies and Crown
corporations, encouraging them to meet with their unions and seek agreements
within the forthcoming Expenditure Restraint Act
limits. By early December, these agencies and corporations had reached over 30
agreements with their respective bargaining agents.
[60]
The RCMP, on the other hand, was given no opportunity to make
meaningful representations about the forthcoming wage limits. Instead, on
November 17, 2008, Treasury Board met with the RCMP Commissioner and informed
him of the rollbacks and then, on December 11, 2008, confirmed
that it would not implement the RCMP wage increases agreed to in June 2008.
[61]
The Pay Council did not learn that the wage
limits would apply to the wages agreed upon in June 2008 until it was informed
by the Commissioner on December 12, 2008, hours before the Commissioner
notified the general membership of the RCMP of the rollbacks. The Pay Council
representatives soon after requested the chance to meet with the President of
Treasury Board and the Minister of Public Safety. They received no response
until after the January 27, 2009 budget speech, when each agreed to meet with
representatives of the Pay Council. Neither Minister was willing to discuss the
rollbacks at the meetings. On February 11, 2009, the Pay Council submitted
written representations concerning the wage rollbacks to the President of
Treasury Board, but they were rejected without discussion.
[62]
The unilateral rollback of three years of agreed-upon
wage increases without any prior consultation is self-evidently a substantial
interference with the bargaining process. This conduct was precisely what led
this Court in Health Services to find an unjustified infringement of s.
2 (d). I have difficulty seeing the distinction between that case and
this one. The fact that the rollbacks were limited to a three-year period does
not attenuate the key fact that they were unilateral. Nor does the fact that
consultation was possible on other more minor compensation issues minimize the
severity of the breach.
[63]
The failure to engage in any discussion
meant that the RCMP was denied its right to a meaningful negotiation process
about wages, a central component of employment relationships generally and
particularly for RCMP members whose other benefits — pensions, disability
benefits, paid time off, and service pay — were tied to their wage amounts.
[64]
This breach does not, in my respectful view,
survive the s. 1 proportionality analysis. The government’s articulated
objectives for the Expenditure Restraint Act were to reduce wage
pressure in the private sector; to demonstrate leadership by showing economic
restraint in the use of public funds; and to manage public sector wage costs to
ensure fiscal stability. To be rationally connected to these objectives, it
must be reasonable to conclude that the means adopted by the government, in
this case the unilateral imposition of rollbacks of the previously
agreed-to RCMP wage increases, would help meet the objectives.
[65]
The
fact that there are fiscal concerns does not give the government an
unrestricted licence in how it deals with the economic interests of its
employees. In Re British Columbia Railway Co. and General Truck Drivers and
Helpers Union, Local No. 31 (unreported, June 1,
1976), Chairman Owen Shime articulated what have come to be seen as six guiding
criteria for assessing the fairness of wage settlements for public employees
covered by collective agreements. His list of considerations, summarized in Workplace
Health, Safety and Compensation Commission (Re), [2005] N.B.L.E.B.D. No. 60
(QL), included the following criteria of particular relevance:
Public employees should not be
required to subsidize the community or the industry in which they work by
accepting substandard wages and working conditions. . . . [O]n balance, if the
community needs and demands the public service, then the members of the
community must bear the necessary cost to provide fair and equitable wages and
not expect the employees to subsidize the service by accepting substandard
wages. If economies are required to cushion the taxes then they may have to be
implemented by curtailing portions of the service rather than wages and working
conditions . . . .
. . .
. . . Consideration should be
given to the wage rates paid to workers performing similar jobs in other
industries, in both the private and public sectors. What are the comparisons to
that which prevails in other sectors of the economy? . . . [W]hat are the
patterns set in similar occupations in private sector businesses? [para. 26]
[66]
The Shime criteria continue to be relied on by
arbitrators: Re Canadian Union of Public Employees and Province of
New Brunswick (1982), 49 N.B.R. (2d) 31; Halifax (Regional Municipality)
and I.A.F.F., Loc. 268 (Re) (1998), 71 L.A.C. (4th) 129 (N.S.); New
Brunswick (Board of Management) (Re), [2004] N.B.L.E.B.D. No. 36 (QL); New
Brunswick (Board of Management) (Re), [2004] N.B.L.E.B.D. No. 24 (QL); New
Brunswick (Board of Management) (Re), [2011] N.B.L.E.B.D. No. 12 (QL); Workplace
Health, Safety and Compensation Commission (Re); New Brunswick (Board of
Management) and N.B.U.P.P.E. (2010), 184 C.L.R.B.R. (2d) 72 (N.B.L.E.B.); New
Brunswick (Board of Management) v. N.B.U.P.P.E., 2006 CarswellNB 332 (WL
Can.) (L.E.B.); Prince Edward Island (Department of Health & Wellness)
v. P.E.I.U.P.S.E., 2010 CarswellPEI 78 (WL Can.); and N.B.T.F. v. New
Brunswick (Board of Management), 2004 CarswellNB 653 (WL Can.) (L.E.B.).
[67]
Additional guidance can be taken from the
Committee of Experts on the Application of Conventions and Recommendations of
the International Labour Organization (ILO), which expressed the view that even
in the midst of a fiscal crisis, there are limits on the extent to which
governments can restrain public sector wages that are the subject of collective
agreements (International Labour Office, Collective bargaining in the public
service: A way forward (International Labour Conference, 102nd Sess.,
2013), at p. 124). Notably too the ILO has recognized a general principle that
“any limitation on collective bargaining on the part of the authorities should
be preceded by consultations with the workers’ and employers’ organizations in
an effort to obtain their agreement” (Freedom of Association: Digest
of decisions and principles of the Freedom of Association Committee of the
Governing Body of the ILO (5th (rev.) ed. 2006), at para. 999).
[68]
All of these complexities and interrelated
factors make the need for meaningful consultation with affected employees
particularly crucial.
[69]
While wage rollbacks may technically be seen to
be rationally connected to fiscal stability and responsibility, the refusal to
engage in any meaningful form of consultation is not. Treasury Board consulted
directly with all 17 bargaining agents of the core public service before the Expenditure
Restraint Act was enacted. There is nothing in the record to explain what
made the RCMP singularly ineligible for discussions about whether or how to
roll back its agreed-upon wage package, or how refusing to engage in such
discussions furthered the government’s ability to address its fiscal concerns.
[70]
But even if rationally connected, a measure must
also be “carefully tailored so that rights are impaired no more than
necessary” (RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R. 199, at para. 160).
[71]
Because meaningful consultation took place with
almost every other bargaining agent in the core public service, it is clear
that less infringing options than a complete absence of negotiations were
available to the government. The unilateral rollback of wages through the Expenditure
Restraint Act cannot, therefore, be said to be minimally impairing.
[72]
I would allow the appeal.
Appeal
dismissed with costs, Abella J.
dissenting.
Solicitors for the
appellants: Nelligan O’Brien Payne, Ottawa.
Solicitor for the
respondent: Attorney General of Canada, Toronto.
Solicitor for the
intervener the Attorney General of Ontario: Attorney General of Ontario,
Toronto.
Solicitor for the
intervener the Attorney General of British Columbia: Attorney General of
British Columbia, Victoria.
Solicitor for the
intervener the Attorney General for Saskatchewan: Attorney General for
Saskatchewan, Regina.
Solicitor for the
intervener the Attorney General of Alberta: Attorney General of Alberta,
Edmonton.
Solicitors for the
intervener the Canadian Labour Congress: Sack Goldblatt Mitchell, Toronto.
Solicitor for the
intervener the Professional Institute of the Public Service of Canada: Fay
Faraday, Toronto.
Solicitor for the
intervener the Canadian Union of Public Employees, Local 675: Canadian Union
of Public Employees, Montréal.
Solicitors for the
intervener the Public Service Alliance of Canada: Raven, Cameron, Ballantyne
& Yazbeck, Ottawa.
Solicitors for the
interveners Confédération des syndicats nationaux and the Union of Canadian
Correctional Officers: Laroche Martin, Montréal.