Northern Exposure

Supreme Court of Canada reshapes labor law (again)

by John D.R. Craig, Christopher D. Pigott, and Brandon Wiebe

In the January 2015 decision of the Supreme Court of Canada in Saskatchewan Federation of Labour (SFL), the Court found, for the first time, that Canadian workers have a constitutional “right to strike.”

In reaching this conclusion, the Supreme Court overturned almost 30 years of case law that had expressly established that the guarantee of freedom of association in section 2(d) of the Canadian Charter of Rights and Freedoms does not protect strike activity.

Notably, SFL came out on the heels of two other landmark decisions on section 2(d) of the Charter. Together, these decisions raise questions about basic aspects of Canada’s labor relations system and could reshape Canadian workers’ rights to organize, bargain collectively, and take strike action.

Mounted Police Association of Ontario (MPAO)—right to organize/bargain collectively

The first decision released by the Supreme Court, MPAO arose from a Charter challenge brought by several associations of members of the Royal Canadian Mounted Police (RCMP). The challenge targeted the RCMP’s current labor relations system—the Staff Relations Representative Program (SRRP). Under this scheme, RCMP members may not engage in traditional collective bargaining with RCMP management; instead, they are represented by the SRRP, which provides for elected representatives to engage and consult with management on workplace issues.

In MPAO, a 6-1 majority of the Supreme Court found that the SRRP scheme violated RCMP members’ right to freedom of association under section 2(d) of the Charter.

In reaching this conclusion, the majority appeared to water down the strict test that a previous case, Fraser v. Ontario (Attorney General) had established for violations of section 2(d) in the labor context. In particular, the majority in MPAO found that an applicant must establish only that government action in the labor context “substantially interferes” with workers’ ability to engage in meaningful association, not render such association “effectively impossible” (the standard established in Fraser).

As well, after “clarifying” its ruling in Fraser in this way, the majority went on to find that the “essential features” of a Charter-compliant labor system are employee “choice” and “independence” from management. However, the majority then emphasized that section 2(d) does not require a particular form of labor relations, including the adversarial Wagner Model that applies to most Canadian workplaces.

Justice Marshall Rothstein dissented, strongly disagreeing with the majority’s conclusions and finding, like the unanimous Ontario Court of Appeal below, that the SRRP meets the standard set in Fraser. Rothstein also argued that the majority’s new approach to section 2(d) effectively “constitutionalizes” the adversarial Wagner Model of collective bargaining and thereby prevents governments from introducing alternative labor frameworks like the SRRP. In his view, this is precisely what the Court had cautioned against in Fraser.

Meredith v. Canada—right to bargain collectively

The dispute at issue in Meredith (released on the same day as MPAO) also arose from a conflict between members of the RCMP and the federal government. Specifically, Meredith considered whether the Expenditure Restraint Act (ERA) violated RCMP members’ right to freedom of association under section 2(d) of the Charter by unilaterally reducing scheduled wage increases without prior consultation.

A 6-1 majority of the Supreme Court concluded that the ERA did not violate section 2(d) of the Charter. In reaching this conclusion, five judges adopted the approach to section 2(d) advanced in MPAO. In short, the majority concluded that no violation of section 2(d) occurred because, on the facts, a process of consultation between RCMP members and management regarding compensation continued after the ERA was enacted. Notably, the majority’s conclusion on this point appears to have been motivated by the fact that this consultation process ultimately resulted in some increases to RCMP members’ compensation.

Saskatchewan Federation of Labour—right to strike

 The decision in SFL was released just two weeks after MPAO and Meredith. It addressed Saskatchewan’s Public Service Essential Services Act (PSESA), which establishes an “essential services” system through which public-sector employers in Saskatchewan can “designate” certain employees, thereby prohibiting them from going on strike.

A 5-2 majority of the Supreme Court determined that the PSESA violated section 2(d). In its reasons, the majority expressly concluded, for the first time, that the guarantee of freedom of association in section 2(d) applies to strike activity.

The majority stated that it based this decision on several factors, including its view of the history of strike activity in Canada and recent legal developments at the international level and in foreign jurisdictions. However, it is also clear that the majority’s decision was motivated by its view that collective bargaining cannot be “meaningful” unless workers have the ability to withdraw their labor.

Relying on its decisions in BC Health Services and MPAO, the majority stated that the “test” for a breach of section 2(d) in this context examines whether “the legislative interference with the right to strike in a particular case amounts to a substantial interference with collective bargaining.” The majority does not provide a detailed explanation of this test, but it does suggest that its main objective is to determine whether the government action at issue upsets the balance of power between workers and the employer in the context of a collective bargaining dispute.

In a single sentence, the majority purported to apply this test to the PSESA and found that the legislation violates section 2(d) of the Charter because it prevents designated employees from engaging in any work stoppage during the bargaining process.

The majority also concluded that the legislation could not be saved under section 1 of the Charter because it did not minimally impair affected workers’ right to freedom of association. The majority reached this conclusion for three main reasons:

1. The legislation allows employers to determine unilaterally whether and how essential services are to be maintained during a work stoppage, and there is no “adequate review mechanism” through which determinations can be challenged;
2. The legislation requires designated employees to perform all of their duties during a work stoppage, not just those duties that are essential; and,
3. The legislation does not include a “meaningful dispute resolution mechanism” (such as interest arbitration) for bargaining disputes.

Implications for employers in Canada

In an emphatic dissent, Justices Rothstein and Richard Wagner rejected the SFL majority’s reasoning and findings. In particular, they argued that the majority’s broad statements and conclusions introduced “great uncertainty” into Canadian labor relations and rendered all statutory limits on the right to strike “presumptively unconstitutional.” This suggestion is very concerning given that strikes are currently heavily regulated and restricted. Public- and private-sector employers could be facing a wave of costly and time-consuming litigation as unions and worker advocates test the limits of the newly recognized (and uncertain) right to strike.

It is notable that every jurisdiction in Canada has some form of legislation in place compelling the provision of essential services during a strike. For example, s. 72 of the Labour Relations Code in British Columbia, while not identical to the PSESA, allows the minister to designate certain facilities, productions, and services as essential services. In light of the reasoning in SFL, there is a good chance that provisions with similar effect in other jurisdictions will be the targets of Charter challenges.

The potential success of future litigation is impossible to predict given the inconsistency of the Supreme Court in this area of the law. The Court’s recent approach to labor rights under section 2(d) of the Charter has demonstrated a notable disregard for prior decisions and coherent principles. Given this, and in light of the changing composition of the Court (only four members of the majority in SFL remain on the Court today), a future section 2(d) case raising collective bargaining and/or strike issues could well see the Court changing directions yet again.