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This case involved a constitutional challenge to The Public Services Sustainability Act (“PSSA”), brought on behalf of a labour coalition comprised of the Manitoba Federation of Labour (“MFL”) and 28 plaintiff unions. The claim alleged that the PSSA violated the plaintiffs’ right to freedom of association under s. 2(d) of the Canadian Charter of Rights and Freedoms (the “Charter”)

The PSSA imposed a four-year “sustainability period” on more than 110,000 public sector workers, during which wages and additional remuneration increases were frozen for the first two years and capped at 0.75% and 1% in years three and four. Upon proclamation, the PSSA would take retroactive effect, invalidating previous collective agreements and clawing back wages beyond its limits.

On June 11, 2020, Madam Justice McKelvey issued her decision, concluding that the PSSA has significantly impacted the associational rights and protections of public sector employees and that such infringement could not be demonstrably justified in a free and democratic society.

As such, the parties will appear before Justice McKelvey again, at a future date, for specific remedies and damages to be determined.

The Status of the PSSA

The PSSA became law in June 2017 but has never been proclaimed into force.

As such, the Government argued that the legislation was not ripe for a constitutionality review, and that all collective bargaining that had taken place since the enactment of the PSSA had simply been undertaken in accordance with Government mandates and policies and not as a consequence of the PSSA.

Justice McKelvey rejected the Government’s argument, as she was satisfied, based on the plaintiffs’ significant evidence regarding collective bargaining, that the Government and other public sector employers funded by government had proceeded as if the PSSA had been proclaimed and was in effect, and that the PSSA had played a significant and substantial role in labour relations in Manitoba. She stated: “It is disingenuous to suggest that Government’s negotiating mandates and policies are simply that and not the PSSA sword of Damocles hanging over the unions with respect to wage restraint and the retroactivity claw back provisions” (para. 276).

The Duty to Pre-Legislative Consultation / Pre-Legislative Collective Bargaining

One of the issues in the case was whether a consultative process that took place between the Government, the MFL, and 10 of the plaintiff unions in the 2 months before the PSSA was introduced in the Legislature was meaningful and done in good faith, and also whether a pre-legislative consultation process can even be a constitutionally adequate substitute for a bargaining process between unions and employers. The plaintiffs argued that the consultation process was not done in good faith and is not a substitute for the Charter protected bargaining process in any event.

Justice McKelvey found that while Government said that it wished to consult with unions before legislation was enacted, it was never prepared to consider any options other than wage restraint legislation. Nor was even a varied content of that legislation likely possible. Instead, as early as 6 months before the “consultation” process began, Government was pursuing a public service sustainability model similar to unproclaimed legislation in Nova Scotia. The consultation was accordingly not meaningful. Further, she found that the government had no duty to consult or engage in collective bargaining prior to enacting the legislation.

The Constitutionality of the PSSA

Justice McKelvey was satisfied that the PSSA, even in its unproclaimed state, substantially interfered with the freedom of association and violated s. 2(d) of the Charter, based upon a contextual and fact-driven analysis of the extensive trial evidence submitted by the plaintiffs, including their labour relations expert, Dr. Hebdon.

First, Justice McKelvey found that the PSSA prevents meaningful collective bargaining on monetary terms or benefits – an area central to the freedom of association and the capacity of unions to achieve a very significant common goal.

Next, Justice McKelvey determined that the overall impact of the PSSA on the process of meaningful, good faith collective bargaining rose to the level of substantial interference. She held that “[t]he PSSA operates as a draconian measure that has inhibited and dramatically reduced the unions’ bargaining power” (para. 426). In particular, the legislation removes monetary issues from the bargaining table, and thereby inhibits the unions’ ability to trade-off monetary terms and benefits for non-monetary enhancements, such as job security. In this way, the right to meaningfully associate in pursuit of important workplace goals was denied.

Justice McKelvey found that the collective agreements that had been concluded since the passage of the PSSA reflected only minor improvements, which demonstrated a minor degree of bargaining power. While the results of collective bargaining are not determinative in a s. 2(d) analysis, Justice McKelvey accepted that these outcomes illustrated the impact on associational activity caused by the PSSA. Moreover, she accepted that most of these agreements were achieved under duress and the threat of the PSSA’s claw back provisions, and had been conditionally ratified, subject to the PSSA’s constitutional status (an unusual process).

Justice McKelvey found the Government’s utilization of wage restraint legislation particularly troubling in light of the evidence of bargaining history in the Manitoba public sector, which demonstrated that wage freezes had been collectively bargained with substantially the entire public service in the aftermath of the 2008 global financial crisis, albeit with trade-offs, such as layoff protection. Justice McKelvey found that it was precisely these trade-offs that Government wished to avoid through the PSSA, by taking a “strident, inflexible and rigid approach to labour negotiations” (para. 334).

Section 1

Justice McKelvey accepted the plaintiffs’ argument that the Government did not meet even the first component of the Oakes test under s. 1 of the Charter, in that the statutory objectives of deficit reduction and fiscal stability were insufficient to establish a free-standing pressing and substantial objective. Applying case law that indicates that budgetary considerations alone, in the absence of a fiscal emergency, will be insufficient to justify an infringement of a Charter right, Justice McKelvey noted that neither of the financial experts who gave evidence in this case opined that Manitoba was in a situation of financial crisis. Manitoba’s state of affairs was very different than the global economic recession that provided the backdrop to the Expenditure Restraint Act cases (which she distinguished).

Justice McKelvey accepted that the Government is entitled to make policy choices, but noted that those choices, including reducing income taxes and lowering the PST, served to substantially reduce the amount of revenue available to service the Manitoba deficit.

With respect to minimal impairment, Justice McKelvey accepted the unions’ submission that the Government did not meaningfully consider any alternatives other than legislation. Before “consultation” with unions commenced, the Government had already drafted legislation, which included the two-year wage freeze. Additionally, the Government was not forthcoming with information sought by unions during the purported consultation process, which negated the unions’ ability to participate in meaningful consultation, even of the proposed legislation. Justice McKelvey concluded that Government, at no time, considered a “blank slate” of options with respect to public sector cost control, and, in particular, would not consider free collective bargaining, despite that wages freezes had been negotiated in the past. All of the evidence denoted early acceptance and pursuit of a Nova Scotia-like legislative wage restraint model: the “die was cast” (para. 404).

At the final “balancing” stage of the Oakes analysis, Justice McKelvey accepted that the evidence established that the PSSA affected the relationships between the unions and their members, as well as between the unions and employers. She held that the Government’s actions will have a long-term effect and potentially create a chilling of relationships in future rounds of collective bargaining. Justice McKelvey concluded: “The Government is facilitating popular tax revenue reduction measures on the backs of public sector workers. Proportionality does not exist.”

Conclusion

This powerful decision is a credit to the MFL and the Manitoba unions who united to defend the right to meaningful collective bargaining on behalf of their members and makes a significant contribution to the increasing recognition of workers’ rights and the importance of those rights in Charter jurisprudence.

Union constitutions and bylaws are the central documents in the governance of internal union affairs and the relationship between unions and their members.

Unions faced with the unprecedented circumstances resulting from COVID-19, the declaration of a province-wide state of emergency under The Emergency Measures Act by the Manitoba government, and related orders issued by the chief provincial public health officer under The Public Health Act, including the limitation on gatherings to 10 or fewer people, may be grappling with how to comply with mandatory requirements in their constitution and bylaws. For example, any of the following constitutional requirements may be directly impacted:

• Membership meetings;
• Executive, council, and committee meetings;
• Elections;
• Specific time limits, and
• Conducting important business, such as approving budgets

Most union constitutions do not contain provisions authorizing alternative means for satisfying the above kinds of requirements in circumstances in which they cannot be carried out safely, since the constitutional draftspersons never anticipated that a scenario like the one presented by COVID-19 might arise.

Our Labour Department has already been assisting unions with navigating their legal obligations under their constitution and bylaws in these challenging times and can do so for your union if you find yourself in difficulty in this regard. We can also provide advice and recommendations regarding possible amendments to these governance documents in order to better position unions to address similar situations in the future.

By Jeff Smorang

The Government of Canada has consolidated its previously announced benefit programs (Emergency Care Benefit and the Emergency Support Benefit) into one program called the Canadian Emergency Response Benefit. This benefit is designed to help workers who have lost their employment due to the COVID-19 pandemic.

Canada Emergency Response Benefit (CERB)

This program will provide taxable income support payments of about $2000 per month to Canadians who have lost their job, are sick, quarantined, or taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures. CERB will run for 4 months, backdated to March 15, 2020.

This program applies to all Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not. It would also apply to those who are still employed but are not receiving income because of disruptions to their work situation due to COVID-19.

To qualify, applicants must have had $5,000 in employment income, self-employment income, or maternity or parental leave benefits for 2019 or in the 12-month period preceding the day they make the application.

Those who are already receiving EI Benefits will continue to receive them. Those who have applied for EI Benefits, but who have yet to be processed, will not need to re-apply as they will automatically be shifted to CERB.

Applications to CERB will be available in early April 2020.

EI Benefits After CERB

If workers are still unemployed after the 4-month CERB period eligible workers will be switched-over to standard EI if they are still out of work.

The Government of Canada has also relaxed eligibility for EI Sickness Benefits. Those forced to quarantine or self-isolate after the CERB coverage period would be eligible for EI Sickness Benefits.

The Government has streamlined the process for those affected by COVID-19 by giving their claims priority, by setting up a dedicated hotline, by allowing backdating, by waiving the one week waiting period and by not requiring any medical certificate requirements.

Lay-offs

Under CERB, the Employer does not need to lay-off employees as workers can be still employed and collect payments under CERB (as long as they are not receiving an income). If there is still a shortage of work after the CERB period, Employers may want to begin laying-off employees.

An employer can lay-off employees for a lack of work as long as they are likely to return to work once demand is back. Normally, a lay-off becomes a termination where the layoff is longer than 8 weeks in a 16-week period. However, in response to the economic impact of COVID-19, The Government of Manitoba has temporarily relaxed this rule. Any lay-off that occurred after March 1, 2020 will not count towards the normal 8 weeks maximum for lay-offs. While this temporary amendment is in effect, employers can lay-off workers indefinitely.

Laid-off employees can collect EI insurance benefits. An employer may also use a Supplemental Unemployment Benefit (SUB) plan to increase their employees’ weekly earnings when they are unemployed due to a temporary stoppage of work, training, illness, injury or quarantine. This can be used to “top up” regular EI benefits.

Payments from SUB plans that are registered with Service Canada are not considered as earnings and are not deducted from EI benefits.

Work Share Program

The Federal Work Sharing Program was originally designed for a downturn in business for the forestry, steel and aluminum industries. As part of the Government’s response to COVID-19, they have temporarily allowed access to this program for employers who are directly or indirectly experiencing a downturn in business of at least 10% due to COVID-19.

The program provides EI benefits to supplement the wages of eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers. Any income earned from the Work Share Program is not deducted from the employee’s EI benefits.

All employees in each Work Share Unit must agree to reduce their hours of work by the same percentage. A Work Share Unit is a group of employees with similar job duties who agree to reduce their hours of work over a specific period of time. The unit generally includes all employees in a single job description or all employees who perform similar work. A Work-Sharing agreement may include more than one Work Share Unit.

Individual employees in the same job description cannot volunteer to participate in Work-Sharing while others decline to participate and continue to work normal hours. Members with the same job description may decline to participate in the Work Sharing Agreement and can be laid-off to collect regular EI benefits.

The Work Share Agreements are available in a unionized workplace, but the Union must also sign off on the agreement. There must be an equal reduction of hours and sharing of all available work among members of a Work-Sharing unit regardless of any seniority clauses in a collective agreement.

The reduction of hours can vary from week to week, as long as the average reduction over the course of the agreement is from 10% (one half day) up to 60% (three days). The goal of the program is for all participating employees to return to normal working hours by the end of the agreement.

If the employer’s company does not recover as expected and workers are laid off during, or at the end of a Work-Sharing agreement, they can apply to transfer to regular EI benefits.

Due to COVID-19, temporary measures have extended the eligibility of such agreements from 38 week to 76 weeks, eased eligibility requirements, and streamlined the application process.

To be an eligible employer the business must be a year-round business that has operated for at least a year in Canada, it must be a private business, a publicly held company or a not-for-profit organization and they must have at least 2 employees in the Work Share Unit.

To be an eligible employee, one must be a year-round, permanent, full-time or part-time employee who is needed to carry out the day-to-day functions of the business and you must be eligible to receive EI benefits.

The Canada Child Benefit

The Government has increased the Canadian Child Benefits for 2019 and 2020. The increase provides an extra $300 per child through the Canada Child Benefit for 2019-20.

Mel Myers 2020 Labour Conference Rescheduled

Due to health concerns arising from the recent spread of the COVID-19 virus, which continue to evolve on a daily basis, the lawyers at Myers LLP have decided today to reschedule the Labour Conference which was to be held next week on March 19 and 20 to November 9 and 10, 2020, at the Victoria Inn Hotel and Convention Centre.

We apologize for this inconvenience but, in all the circumstances, we feel that it is prudent and in everyone’s best interests that we follow the expert advice we are all receiving to limit or eliminate group gatherings over the next short while, in an attempt to slow the spread of this virus in our province.

We will be in touch with you again as further information becomes available. Registrants who are unable to attend at the rescheduled Conference will be entitled to a full refund.  If you have any questions please contact Elena Gagliardi at elena@plannersplus.ca or by phone at 204-255-7006.