January 16, 2015 By: Christopher C. Rootham
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On January 16, 2015 the Supreme Court of Canada released its decision in Robert Meredith et. al. v. Attorney General of Canada – sometimes referred to as the wage rollback case.

The Supreme Court of Canada upheld the government’s decision to unilaterally roll back scheduled wage increases for RCMP members.

Background

On June 26, 2008, the Treasury Board of Canada largely accepted the recommendation of the RCMP Pay Council for the pay increases for 2008-2010. The RCMP Pay Council is comprised of five members: two management representatives, two representatives of the Staff Relations Representatives (SRR) program, and one neutral chair. The Pay Council functions on the basis of consensus and collegiality, ensuring that any compensation package is based upon input from both RCMP members and management.

In the Fall of 2008, the SRR representatives on the Pay Council began to hear rumours that the scheduled wage increase for 2009 would not be implemented as part of a government-wide initiative to limit wages. On November 28, 2008, the Commissioner of the RCMP sent out a message that he did not know whether the government’s wage limit program would apply to the RCMP. In fact, the Commissioner had already been informed that wage limits would be applied to the RCMP, and Treasury Board recommended that he consult with the SRRs about this decision. No such consultation took place.

On December 12, 2008 the Commissioner announced that the scheduled wage increases for 2009 and 2010 would not be implemented and, instead, there would be lower wage increases. The Pay Council and SRR program lobbied without success for changes to this decision.

In the meantime, the government introduced and then passed the Expenditure Restraint Act. The Expenditure Restraint Act codified the reduced wage increases for RCMP members, and also set out identical wage increases for all public servants.

The Court Challenge

On January 12, 2009, SRR National Executive members Robert Meredith and Brian Roach – on behalf of all members of the RCMP – commenced an application in Federal Court challenging the December 12, 2008 decision to roll back the scheduled wage increases for 2009 and 2010. That application was later expanded to challenge the constitutional validity of the Expenditure Restraint Act.

The application was funded entirely by the Mounted Police Members’ Legal Fund, and would not have been possible without the assistance of the Fund.

The Federal Court allowed the application, concluding that both Treasury Board’s decision and the Expenditure Restraint Act violated s. 2(d) of the Canadian Charter of Rights and Freedoms. The Federal Court of Appeal allowed an appeal from that decision, concluding that the Expenditure Restraint Act did not violate the Charter. The Supreme Court of Canada granted leave to hear an appeal from the Federal Court of Appeal, and that appeal was heard on February 19, 2014.

Supreme Court of Canada Decision

On January 16, 2015, the Supreme Court of Canada rendered its decision in Robert Meredith et al v. Attorney General of Canada. The majority of judges of the Supreme Court of Canada dismissed the appeal from the Federal Court of Appeal, and upheld the validity of the Expenditure Restraint Act.

The majority of the Court (comprised of five of the seven judges who heard the case) stated that while s. 2(d) of the Charter guarantees a right to a meaningful labour relations process, it does not guarantee a particular outcome. The majority concluded that the wage limits set out in the ;Expenditure Restraint Act did not violate the Charter for three reasons.

First, the level at which the Expenditure Restraint Act capped wage increases for members of the RCMP was consistent with the going rate reached in agreements concluded with other bargaining agents in the public service, and so reflected an outcome consistent with actual bargaining processes.

Second, the Expenditure Restraint Act did not preclude consultation on other compensation-related issues in the past or the future.

Third, the Expenditure Restraint Act did not prevent the consultation process from moving forward. Significantly, RCMP members obtained an increase in service pay (from 1% to 1.5% for every five years of service), and service pay was extended to certain civilian members for the first time. A new and more generous policy for stand-by pay was also approved. 

Justice Rothstein would also have dismissed the appeal, but he provided separate reasons for his decision. Justice Rothstein focused on the lobbying done by the SRR program after the wage rollback was announced, and concluded that the various meetings with cabinet ministers and the Commissioner remedied the government’s earlier failure to consult with members of the RCMP before announcing the wage rollback.

Justice Abella dissented in the result of this case. She concluded that the significance of the impact of the Expenditure Restraint Act on Charter rights was greater than the majority concluded. To Justice Abella, ensuring fair wages is among the key purposes of collective bargaining. An employer, no matter how benign its motives, cannot unilaterally reduce the wages of employees without first discussing the rollback. The key fact was that the rollback was unilateral; the fact that it was only for three years did not minimize the severity of the Charter breach. Justice Abella also concluded that this Charter breach was not saved by s. 1 of the Charter. The unilateral imposition of rollbacks was not rationally connected to the government’s objectives. She also stated that “[t]he fact that there are fiscal concerns does not give the government an unrestricted license in how it deals with the economic interests of its employees.” Finally, because meaningful consultation took place with almost every other bargaining agent in the public service, it is clear that less infringing options than a complete absence of negotiations were available to the government.

Implications of the decision

This case should be read together with the Supreme Court of Canada’s decision inMounted Police Association of Ontario, decided on the same day (and discussed in a separate blog entry). In that case, the Court concluded that the system of labour relations at the RCMP is unconstitutional. In this case, the Court confirmed that this finding of unconstitutionality includes the Pay Council system that initially resulted in the higher wages that were rolled back in this case. While the underlying system was unconstitutional, that finding did not (according to the majority) change the result in this case. The Pay Council process “constitutes associational activity that attracts Charter protection despite its constitutional deficiencies.”

There are a number of other constitutional challenges against the Expenditure Restraint Act in varying degrees of completeness. Some other challenges have already been dismissed (such as the Ontario Court of Appeal’s decision involving the Association of Justice Council); other challenges are still in the court system at various stages of appeal. While the Court’s decision does not conclusively determine the results in those cases, the Court’s general approval for the Expenditure Restraint Act will make it more difficult for those other claims to succeed.

As counsel for the unsuccessful Appellants, I am of course biased – and I prefer the dissenting reasons of Justice Abella to the majority reasons. However, the most concerning portion of the majority’s decision is its statement (at paragraph 28) that the legislation was constitutional in part because “the level at which the ERA capped wage increases for members of the RCMP was consistent with the going rate reached in agreements concluded with other bargaining agents inside and outside of the core public administration and so reflected an outcome consistent with actual bargaining processes.” Collective bargaining, as an aspect of freedom of association, is a procedural right. The Court on many occasions makes it clear that freedom of association guarantees a process, not any particular outcome. It is strange, then, for the Court to excuse a lack of a process because the result reached fell within a reasonable range of outcomes. The Court seems to be saying that the lack of a process doesn’t matter, because the result imposed was the same as the result that other unions reached using a constitutionally fair process.

Collective bargaining is about trade-offs. Employees who accept lower wages may have done so to guarantee other benefits. A government should not be able to justify wage restraint legislation by pointing to agreements reached with certain employees, knowing that those employees may have received other benefits or concessions in exchange for the lower wages.

This case is not carte blanche for governments to enact wage restraint legislation and overturn collective agreements or other wages created using an associational process. However, it is an indication that the courts will permit governments to enact time-limited wage restraints on employees so long as some employees agree to the same restraints – even if those same employees only “agreed” to the wage restraints after being threatened with legislation imposing them. Public employees should not have to subsidize their community with substandard wages – yet this is precisely what the Court permitted in this case.

In short, this is part of a worrying trend. The Court has expressed considerable support for collective bargaining in the abstract, but is unwilling to support it in practice. Agricultural workers have a right to collective bargaining in the abstract (Dunmore), but not in practice (Fraser). RCMP members have a right to collective bargaining in the abstract (MPAO), but not in practice (Meredith). An abstract right to the process of collective bargaining is of no use if the Court will not also protect the results of that process. Collective bargaining should not just be about the process – it should also be about the result. Without constitutional protection for the results of collective bargaining, the process becomes less meaningful.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.

Service: Labour Law