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Federal Legislation Reducing Scheduled Wage Rate Increase not Unconstitutional
January 20, 2015
Author(s): Colin Edstrom

In a companion decision to Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1 (previously reported here), the Supreme Court of Canada found that the Federal government’s unilateral reduction of wage rates for public sector employees did not infringe the right to a meaningful collective bargaining process as protected by section 2(d) of the Charter of Rights and Freedoms.

In June 2008, the Federal Treasury Board announced salary increases of 3.32%, 3.5% and 2% for RCMP members for the years 2008 to 2010. The global economic crisis hit shortly thereafter. In response, the Federal government passed the Expenditure Restraint Act (“ERA”), which had the effect of rolling back the scheduled wage increases and imposing a limit of 1.5% on wage increases in the public sector for the 2008 to 2010 fiscal years. The ERA was passed without any consultation with affected unions or employee associations. As a result, two RCMP members brought a constitutional challenge alleging that the reduction of wages without prior consultation infringed the right to a meaningful bargaining process as protected by section 2(d) of the Charter.

The Supreme Court of Canada disagreed with the RCMP members, finding that the ERA did not substantially interfere with the collective bargaining process. As noted by the majority of the Court, “[s]ection 2(d) guarantees a right to a meaningful labour relations process, but it does not guarantee a particular outcome”. The only guarantee is “the right of employees to associate in a meaningful way in the pursuit of collective workplace goals”. In the context of the ERA, the wage rollbacks were time-limited in nature, were shared by all public servants, and did not permanently remove the subject of wages from collective bargaining. Further, the unilateral process in which the ERA was implemented did not preclude consultation on other compensation-related issues, either in the past or the future. The RCMP members continued to have access to a process for consultation on other compensation-related issues.

As a result, the Court concluded that the Federal government’s conduct did not substantially impair the collective pursuit of the workplace goals of RCMP members. That being said, the Court was quick to point out that its conclusions, as they relate to the ERA, “should not be taken to endorse the constitutional validity of that process or of similar schemes”. Each case will be decided on its own facts. A contextual analysis of whether the legislation substantially impairs the employees’ collective pursuit of workplace goals is required.

Meredith v. Canada (Attorney General), 2015 SCC 2

Questions relating to the content in this article may be directed to Keith Mitchell.