Court Of Appeal Summaries (August 15 – August 19, 2016)

Civil Decisions:

Gordon v. Canada (Attorney General), 2016 ONCA 625

[Hoy A.C.J.O., Blair and Lauwers JJ.A.]

Counsel:

A. Raven and A. Astritis, for the appellants, the Public Service Alliance of Canada et al

F. Faraday, for the appellants, the Professional Institute of the Public Service of Canada et al.

K. Hucal and J. Bricker for the respondent, Attorney General of Canada

Key Words: Labour Law, Government of Canada, Unions, Collective Bargaining, Expenditure Restraint Act, Constitutional Law, Canadian Charter of Rights and Freedoms, s. 2(d), Freedom of Association, Substantial Interference Test, s. 1, Oakes Test, Evidence, Opinion Evidence, R. v. Mohan, [1994] 2 S.C.R. 9, Rules of Civil Procedure, Rule 53, Form 53, Experts, Duty to Court, Participant Experts, Westerhof v. Gee Estate, 2015 ONCA 206, 124 O.R. (3d) 721

Facts:

In response to the global recession that occurred from August 2007 until early 2009, the federal Department of Finance was looking to cut costs and give leadership to the public in addressing the harsh economic downturn. Since compensation costs were a significant component of government spending, the Department of Finance asked the Treasury Board Secretariat for options to limit compensation costs in the round of collective bargaining then occurring with the federal unions. The Secretariat produced a paper that set out three options. One option - the option recommended by the Treasury Board Secretariat - was to limit salary increases by freezing or limiting wage increases. The Treasury Board Secretariat advised that this option could be completed by attempting, through collective bargaining, to reach agreements consistent with wage increase limits. The Government took that advice.

The Government also created the Expenditure Restraint Act, S.C. 2009, c. 2, s. 393 ("ERA"). The ERA was introduced in Parliament on February 6, 2009, and received Royal Assent on March 12, 2009. The ERA applied to all employees within the federal government's core public administration ("CPA"), employees of Crown corporations and those employed by Parliamentary employers such as the Senate and House of Commons. The ERA did not freeze wages, reduce wages or eliminate existing merit or similar types of increases. Rather, for the fixed restraint period, it implemented an upper limit on wage increases, prohibited the restructuring of pay rates, and prohibited any increase in additional remuneration, with certain limited exceptions. The wage caps were consistent with the Statement but also capped wage increases for the fiscal year 2006-2007, except for collective agreements concluded or arbitral awards issued before December 8, 2008. The ERA also prevented unions from making up any losses in bargaining after the end of the restraint period.

There are a total of 62 bargaining units represented by the appellant unions, which were each at different stages of collective bargaining in the fall of 2008. Many of the bargaining units represented by the appellants reached collective agreements that are not challenged in this case. However, the core of the unions' complaints is that the ERA conclusively excluded wage increases beyond the caps. They point to several situations where the collective bargaining process continued after the ERA came into force, and argue the ERA's provisions substantially interfered with their members' collective bargaining rights.

The appellant unions seek declarations that provisions in the ERA limited their members' freedom of association under s. 2(d) of the Canadian Charter of Rights and Freedoms. They also challenge the Government's conduct in collective bargaining, before and after the ERA's enactment. They submit the Government's conduct and provisions in the ERA substantially interfered with their right to a meaningful collective bargaining process by interfering with bargaining on wages, overriding freely negotiated wage increases, capping wage increases during the restraint period, and preventing bargaining for catch-up after the restraint period. They assert these alleged limits have not been demonstrably justified under s. 1, and seek relief under s. 24 of the Charter.

The application judge dismissed the unions' applications because their associational rights under s. 2(d) of the Charter were not impermissibly limited by the Government's conduct in collective bargaining or provisions in the ERA. Alternatively, the application judge held that the Government had demonstrably justified any such limits under s. 1 of the Charter in light of the global economic crisis then affecting Canada.

Public Service Alliance of Canada ("PSAC") and the Professional Institute of the Public Service of Canada ("PIPSC") appeal the application judge's decision. Together, PSAC and PIPSC represent about 88% of unionized employees in the federal public service. They submit that the application judge's findings on the Charter should be overturned. Further, they submit that the application judge erred in accepting the opinion expert evidence of Associate Deputy Minister Paul Rochon.

Issue:

Did the application judge err in concluding that neither the ERA nor the Government's conduct in collective bargaining limited the union members' associational rights under s. 2(d) of the Charter? Did the application judge err in concluding that the Government justified any such limits under s. 1 of the Charter? Did the application judge err in accepting the opinion evidence of Associate Deputy Minister Paul Rochon in preference to the evidence of economics professor Dr. Lars Spencer Osberg? Holding: Appeal dismissed.

Reasoning:

(1) Did the application judge err in concluding that neither the ERA nor the Government's conduct in collective bargaining limited the union members' associational rights under s. 2(d) of the Charter?

No. Neither the ERA nor the Government's conduct before or after the enactment of ERA limited the appellants' s. 2(d) rights. In labour relations, s. 2(d) protects a meaningful process of collective bargaining that gives employees a degree of choice and independence that allows them to determine their collective interests and meaningfully pursue them.

The test for determining whether there has been a breach of s. 2(d) is the substantial interference test from BC Health Services. Under the substantial interference test, the question is "whether the process of voluntary, good faith collective bargaining between employees and the employer has been, or is likely to be, significantly and adversely impacted". The inquiry is contextual and factual. To determine whether a government measure affecting the protected process of collective bargaining amounts to substantial interference involves two inquiries: The first inquiry is into the importance of the matter affected to the process of collective bargaining, and more specifically, to the capacity of the union members to come together and pursue collective goals in concert. The second inquiry is into the manner in which the measure impacts on the collective right to good faith negotiation and consultation.

Section 2(d) protects the process of bargaining and not outcomes, but that does not mean that what is being bargained over or the outcomes of bargaining are irrelevant to the s. 2(d) analysis. An employer that adversely affects the ability of unions to bargain about significant matters - such as salary, hours of work, job security and seniority, health and safety protections, and equitable and humane working conditions - may be constitutionally suspect. As such, the outcome of bargaining is relevant to assessing whether there has been substantial interference with the collective bargaining process.

Did the Government undermine good faith collective bargaining, within the meaning of s. 2(d) of the Charter, when it threatened to legislate wage rate increase caps if the unions did not enter into collective agreements that respected those caps? No. The Government bargained in good faith before the ERA's enactment. There are no palpable and overriding errors in the application judge's factual determinations. The application judge took a contextual approach in his assessment of the collective bargaining that took place starting in November 2008. The application judge's reasons demonstrate both the complexity of the situation and the care taken by the application judge in assessing the appellants' arguments and the evidence. His assessment of the evidence attracts this court's deference.

The application judge rightfully noted that the Government did partake in hard bargaining, but that the dialogue or process was never rendered meaningless. Hard bargaining is a permissive form of good faith bargaining. There was never a significant disparity of bargaining power between the Government and the unions. Limits on compensation were not actually imposed until the ERA was passed in 2009. As such, the Government's conduct was a permissive form of good faith bargaining.

Did the Government's failure to consult with the unions about the prospective scope of the ERA infringe s. 2(d) of the Charter? No. The appellants' complaint...