The Ontario Superior Court of Justice has affirmed that the federal government did not violate unionized employee’s freedom of association by legislating wage increase limits in The Professional Institute of Public Service of Canada v Canada (Attorney General).  This is an interesting development for governmental policy makers and public employers, particularly in light of previous jurisprudence from the Supreme Court of Canada that had addressed the scope of the constitutional protection of freedom of association.

As a result of the financial downturn of 2008, the federal government imposed wage increase restrictions for its employees by passing the Expenditure Restraint Act (the “Act”). Two unions representing Federal employees, were engaged in collective bargaining at the time the legislation was enacted. These unions applied to the Court arguing the Act was unconstitutional because it violated the employee’s right to freedom of association under s. 2(d) of the Charter. In essence, they argued that the restriction on wages prevented good faith bargaining. The federal government argued that good faith bargaining was still possible and that the union simply made their claim because they were unhappy with the outcome of negotiations.

After the Act was passed, the collective bargaining negotiations broke down with the two unions. Some bargaining units represented by the unions did reach agreements imposing the wage increase limits set out in the Act. Others did not reach agreements due, in part, to disagreement over the wage increase limits. Where agreements had already been reached, they were rolled back to reflect the Act by effect of the new legislation.

The Courtnoted that freedom of association includes the freedom of the collective to act to achieve its goals. While it does not include the right to any particular outcome, it does require that the parties engage in “meaningful discussion.” However, the unions were wrong, in the Court’s view, to conflate the right to collectively bargain with the right to freely associate. As the Act was directed at all employees and not the unions specifically, it did not infringe on the freedom of association. In addition, s. 2(d) of the Charter only protects against substantial interference in freedom of association. The Court held that wage increase limits were in the context of an economic crisis and not so substantial as to render the freedom of association “substantially or effectively impossible.” The Court found that there is no absolute right to collective bargaining. Negotiation about wage increases was only a small part of the greater negotiation process.  When the process is looked at as a whole, the union and federal government engaged in a meaningful bargaining process.

While the Court found that the Act did not breach s. 2(d) of the Charter, the decision went on to conclude that the legislation would nevertheless have been saved by s. 1 of the Charter and therefore upheld as constitutional.  This was because, in the context of an economic crisis, the federal government sought to  respond by controlling its own spending.  This was determined to have been a sufficiently important objective and justified the legislation in the circumstances.

It remains to be seen if the decision will be successfully challenged on Appeal.

As it stands, this case supports the conclusion that the right to freedom of association does not exist in a vacuum, but rather must be viewed in the specific context of time, space, and economic realities. These factors can justify government action that affects wage negotiations through legislated restrictions. Whether the parties have engaged in a meaningful bargaining process will depend not on the approach taken to any one issue, but on the negotiation process as a whole.  The impetus behind the wage restrictions affecting bargaining outcomes may also be a relevant factor.  This decision will be of particular relevance in the Province of Ontario where wage restraint legislation has been implemented in relation to non-union public sector employees. Caution must, however, be exercised in interpreting the results, particularly with reference to the earlier judgments of the Supreme Court we have noted.

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