Employees Have The Right To Associate But Not Necessarily To Reap An Economic Benefit

On May 27, 2014, the Quebec Court of Appeal held that the constitutional protection afforded by section 2(d) of the Canadian Charter of Rights and Freedoms (the Charter) does not guarantee the economic effects of collective bargaining. Freedom of association protects the collective bargaining process, but not the wage increases deriving from that process.1

The facts

Local 675 of the Canadian Union of Public Employees (CUPE) and the Association des réalisateurs had entered into collective agreements with the Canadian Broadcasting Corporation (CBC) which came into effect on October 1, 2007 and were to end on September 26, 2010 and December 11, 2011, respectively. In CUPE's case, the collective agreement provided for three annual wage increases, namely 2.6% on October 1, 2007, 2.5% on September 29, 2008 and 2.5% on September 28, 2009. In the case of the Association des réalisateurs, the annual wage increases were 3% on December 10, 2007, 2.5% on December 15, 2008, 2,5% on December 14, 2009 and 2.5% on December 13, 2010.

In August 2007, a serious financial crisis had begun to affect industrialized nations. In the fall of 2008, the situation worsened precipitously and, for the first time since 1991, Canada was facing a negative growth outlook for 2009. In an Economic and Fiscal Statement issued on November 27, 2008, the federal government announced that its response to the crisis would focus on "strong fiscal and financial management." The approach consisted of trying to keep the country from running too large a deficit without resorting to tax hikes or otherwise adding to the fiscal burden on businesses and individuals. Accordingly, the government announced measures designed to reduce and ensure predictability of total payroll for the public sector. This was the context in which the Act to restrain the Government of Canada's expenditures in relation to employment2 (Act) came into force on March 12, 2009, which legislation capped wage increases for federal civil servants at 2.5% for 2006, 2.3% for 2007 and 1.5% for the following three years. These pay increase caps applied retroactively to collective agreements entered into prior to December 8, 2008, and also rendered inoperative any provisions contained in any subsequent collective agreement that exceeded the prescribed limits. In addition to federal civil servants, the Act also applied to all employees of the CBC. Owing to an unbelievable mix-up, it was only several weeks after its adoption...