In an exciting conclusion to a longstanding dispute, the Supreme Court of Canada recently provided a judgement from the bench in British Columbia Teachers’ Federation v British Colombia (2016 SCC 49). A 7-2 majority ruled in favour of the teachers, substantially adopting the dissenting reasons of Justice Donald from the British Columbia Court of Appeal (2015 BCCA 184, paragraphs 275-400). The decision provides important guidance on the standard of good faith consultation required when governments try to impose legislation that affects labour relations.

The History – Challenges to Collective Bargaining

At issue was the Education Improvement Act, SBC 2012, c 3 (“Bill 22”), which the BCTF argued infringed the teachers’ freedom of association under s. 2(d) of the Charter. The Act essentially nullified hundreds of provisions in the teachers’ collective agreement that addressed classroom composition, class sizes, and other staffing related issues. The government had previously implemented similar changes (“Bill 28”), which were found to be unconstitutional (2011 BCSC 469). The Province attempted to remedy the unconstitutional Bill 28 by conducting pre-legislative consultations before enacting nearly identical provisions in Bill 22. The BCTF again challenged the constitutionality of the legislation.

The Trial Judge decided that Bill 22 was unconstitutional and could not be saved by s. 1 (2014 BCSC 121). She concluded that Bill 22 was invalid from the date on which it purported to come into force. She also awarded $2 million in s. 24(1) Charter damages.

The Decision – The Court Shows Deference to the Trial Judges’ Factual Findings

The Court of Appeal overturned the Trial Judge’s findings on multiple grounds and held that Bill 22 did not infringe section 2(d). However, the Supreme Court agreed with Justice Donald, the lone dissenting judge from the BC Court of Appeal.

Justice Donald explained the importance of good faith in the s.2(d) analysis:

“The freedom of association protected under s. 2(d) of the Charter in the labour relations context is the right of employees to associate in pursuit of workplace goals and to a meaningful process within which to achieve these goals […] This freedom is breached if government legislation or actions substantially interfere with collective bargaining in purpose or effect in such a way that does not respect a process of good faith consultation” (para 283).

One of the main issues was whether the consultation process was sufficient to be consistent with s.2(d). Justice Donald found that consultations could be sufficient in certain cases:

“Pre-legislative consultation, then, can be seen as a replacement for the traditional collective bargaining process, but only if it truly is a meaningful substitution. To be meaningful, the bargaining parties must consult from an assumed position of “approximate equality”.” (para 291).

Before the Supreme Court, the Province argued that the Trial Judge had erred in law by probing too deeply into the substantial reasonableness of the parties’ positions during the pre‑legislative consultations. However, the Supreme Court pushed back on this position, repeatedly asking counsel where they should draw the line with respect to the inquiries that the Trial Judge could make. Counsel for the Province seemed unable to provide a satisfactory answer to the Supreme Court.

The dissent written by Justice Donald and adopted by the Supreme Court reiterates that s.2(d) can be protected through different consultative processes, but that courts may scrutinize those processes to determine whether the parties are acting in good faith:

“the constitutional test for bad faith on the part of government should be expressed in the same language used by the Supreme Court of Canada in Health Services and Fraser. Parties are required to meet and engage in meaningful dialogue where positions are explained and each party reads, listens to, and considers representations made by the other party. Parties’ positions must not be inflexible and intransigent, and parties must honestly strive to find a middle ground. In order to determine whether the government is bargaining in good faith, it may sometimes be necessary to probe and consider the government’s substantive negotiating position.” (para 348).

Justice Donald acknowledged the substantial power imbalance that exists between workers and the government. If the government relies on consultations, workers are without tools such as mediation, arbitration, and strikes, while the government has the power to unilaterally affect labour relations through legislation. With this in mind, Justice Donald reasoned that government would have a “free hand” to act as it pleased if it were not for the court’s ability to inquire into the substantive reasonableness of the government’s position.

The Trial Judge found that during the consultations, the Province had closed its mind to alternatives to the proposed legislation. The Trial Judge also found that the Province did not even read the terms regarding working conditions that were the basis on the BCTF’s position until 5 months into the consultations. Failing to read the other side’s proposal is the absolute minimum that is required from the employer. Justice Donald accepted the Trial Judge’s findings that the Province entered the consultations with no intention of returning the nullified clauses to the collective agreement. He also agreed with the Trial Judge’s findings that the consultation did not demonstrate good faith. In his own words, the Province intended “to keep the door shut”, but allow the union “to have input on exactly what kind of door would be used” (para 322). The Supreme Court also agreed with Justice Donald’s decision in this regard.

The Supreme Court’s remedy was to declare Bill 22 unconstitutional, and of no force or effect. However, the Supreme Court declined to reinstate the Trial Judge’s $2 million damage award.

The Impact Going Forward – What Does s. 2(d) Protect?

While the decision was positive for the BCTF, it also reinforced that governments can use legislation to change the terms of employment, particularly where sufficient consultation is done:

“If the government, prior to unilaterally changing terms of employment, gives a union the opportunity to meaningfully influence the changes made, on bargaining terms of approximate equality, it will likely lead to a finding that the union was not rendered feckless and the employees’ attempts at associating to pursue workplace goals were not pointless or futile” (para 287).

However, the decision also indicated that courts can look at the substantive reasonableness of the parties’ positions when assessing whether the chosen consultation process meets the standard of good faith.

The decision does not mean, as some of the intervenors argued, that unions now have a constitutional veto on legislation. Based on Health Services, Justice Donald reasoned that not all legislation affecting collective bargaining would interfere with 2(d). Rather, only substantial interferences such as the unilateral nullification of terms would infringe 2(d). The nullification of hundreds of terms in this case amounted to a significant interference with the teachers’ rights, especially because there was a temporary bar on negotiating for working conditions. Justice Donald’s comments are worth repeating:

“The act of associating for the purpose of collective bargaining can also be rendered futile by unilateral nullification of previous agreements, because it discourages collective bargaining in the future by rendering all previous efforts nugatory […] This is not an exercise in “constitutionalizing” the terms of a collective agreement or the result of collective bargaining, but is instead the result of constitutionalizing the right to a meaningful process that is not continually under threat of being rendered pointless.” (para 285).

Overall, this decision indicates that governments can legislate changes to employment conditions in collective agreements, albeit only after a good faith consultation process. Therefore, it is incredibly important that unions hold governments to account and continue to fight for freedom of association protections with real teeth.

Article: Joshua Nutt (Articling Student)

Image: Supreme Court of Canada, Wellington St, Ottawa (492095) by Robert Linsdell via Flickr under Creative Commons licence