Name of Case: Health Services and Support — Facilities Subsector Bargaining Assn. v. British Columbia

Supreme Court Panel: Chief Justice Beverley McLachlin, Justices Louis LeBel, Michel Bastarache, Ian Binnie, Morris Fish and Rosalie Abella (majority); Justice Marie Deschamps (dissenting)
 
Court appealed from and date of judgment: Judgment of the British Columbia Court of Appeal, dated July 5, 2004
 
Facts: A coalition of British Columbia health sector unions launched a Charter challenge to that province's Health and Social Services Delivery Act (Bill 29). The controversial 2002 law voided certain provisions of existing collective agreements with the result that: (a) a health sector employer could contract with outside service providers to perform certain services previously provided by the unions; (b) upon layoff, the employer was not required to give more than 60 days notice to employees; (c) the previously agreed regime for the bumping by senior employees of junior employees upon layoff was replaced with a more restrictive one; (d) health care workers or services could be transferred or assigned between different sites; and (e) health sector employers were no longer required to provide laid off employees with the benefits of the Employment Security and Labour Force Adjustment Agreement, which gave such employees up to one year of retraining and assistance in finding alternative positions. Approximately 8,000 jobs in the female-dominated sector were eliminated and, when the employees were subsequently hired by service providers, their wages were sharply reduced.  

The labour coalition argued that, by unilaterally wiping out union gains achieved through collective bargaining, the legislation violated the freedom of association rights guaranteed by the Charter in s.2(d). In essence, the union maintained that collective bargaining is the whole reason for associating in unions, and that freedom of association in unions would be rendered meaningless if government could wipe out core aspects of collective bargaining, namely, the freedom to make collective representations to one's employers, the freedom to negotiate and agree on the terms and conditions of employment in a collective manner, and the ability to rely on and enforce those agreements which are collectively concluded. They argued that the Supreme Court of Canada had opened the door to recognizing this in its landmark decision in Dunmore v. Ontario (Attorney General), [2001] 3 S.C.R. 1016, when it held that Ontario legislation excluding agricultural workers from the Labour Relations Act violated their freedom to organize as protected by Charter s.2(d). The coalition also argued that Bill 29 violated workers' equality rights under s.15(1) of the Charter by targeting female-dominated sectors of the economy and liberty rights under s.7 of the Charter by unjustly stripping workers of their employment.

Case History: A September 11, 2003 decision of B.C. Supreme Court Judge Nicole Garson dismissed the unions' application (see the September/October, 2003 issue of Lancaster's Collective Bargaining Reporter). Judge Garson held that Bill 29 did not limit or interfere with the ability of workers to form or participate in a trade union. Moreover, she found, the plaintiff unions had failed to establish that their claim related to an activity protected by s.2(d), or that the government had targeted associational conduct because of its associational nature. With respect to s.15, Judge Garson held that Bill 29 did not violate the Charter's guarantee of equality rights. Relying on Law v. Canada, [1999] 1 S.C.R. 497, she found that, while Bill 29 adversely affected female workers, the plaintiff unions had failed to demonstrate that these workers were subject to differential treatment on the basis of their sex. As for s.7, Judge Garson noted an ongoing judicial debate as to whether s.7 encompassed economic rights. However, even if it did, Garson held, "section 7 does not extend to protect the right to maintain employment." In Garson's view, a broad reading of s.7 to include the right to maintain employment would allow layoffs to be challenged under the Charter and thereby "render governmental policy-making virtually impossible." 

The unions appealed to the British Columbia Court of Appeal, alleging violations of sections 2(d) and 15 of the Charter.

B.C. Court of Appeal's decision: On July 5, 2004, the B.C. Court of Appeal dismissed the unions' appeal.

In effect, the Court of Appeal drew a sharp distinction between Charter protection for associating in unions, which exists, and Charter protection for what unions actually do in the form of collective bargaining and strikes, which does not exist. Writing for the Court, Justice Allan Thackray pointed out that, in Dunmore, the Supreme Court had explicitly reaffirmed its longstanding position that collective bargaining is not protected under the Charter. He cited this unequivocal statement from the Supreme Court's decision: "[T]he law must recognize that certain union activities — making collective representations to an employer, adopting a majority political platform, federating with other unions — may be central to freedom of association even though they are inconceivable on the individual level. This is not to say that all such activities are protected by s.2(d), nor that all collectivities are worthy of constitutional protection; indeed, this Court has repeatedly excluded the right to strike and collectively bargain from the protected ambit of s.2(d)."

Thackray rejected the unions' contention that s.2(d) extends to "core aspects" of collective bargaining, such as the freedom to negotiate and enforce collective agreements. "In my view," the judge wrote, "the reasons in Dunmoredo not provide a sufficient basis for establishing that the [unions'] core aspects of collective bargaining are protected by s.2(d). In Dunmore, the Supreme Court of Canada affirmed its earlier jurisprudence that collective bargaining and the right to strike are not protected. This, in my view, is fatal to the [unions'] claim."

Furthermore, Thackray ruled, even if the "core aspects" of collective bargaining were within the scope of the Charter 's guarantee of freedom of association, this would be insufficient to accord Charter protection to the collective agreements which the unions had negotiated with the government. This was so, the judge found, because the unions did not have a constitutional right to "full access to the statutory regime of collective bargaining and the right to strike." According to Thackray, "[t]he collective agreements are the product of more than the exercise of the protected core freedoms; they are the product of the exercise of those core freedoms plus the exercise of the [unions'] unprotected, statutory collective bargaining rights."

Those statutory rights were enacted by government and could be modified by government without infringing on the Charter, Thackray held, because "the right to freedom of association does not have as its purpose the near absolute levelling of the playing field that is achieved in labour legislation, particularly in the public sector." 

Thackray also rejected the unions' submission that the government's legislation contravened the Charter's s.15(1) prohibition against discrimination on the basis of sex because it targeted a sector where the majority of workers are women. In the judge's view, the legislation could not be said to draw an impermissible distinction between health care employees and others in the public service. In any event, Thackray held, the status of being an employee in the female-dominated health care sector did not amount to a prohibited ground of discrimination under s.15(1).

Citing the s.15(1) tests set out by the Supreme Court of Canada in Law v. Canada (Minister of Employment and Immigration, [1999] 1 S.C.R. 497, Thackray found that "[t]he appellants have lost several hard fought gains, but they have not lost them because of their personal characteristics." Rejecting the unions' "bald assertion" that women were the target of the legislation, Thackray stated: "[T]he respondent filed material indicating that there were diverse reasons for the legislation, none of which were assertive against females based upon gender." The unions, Thackray noted, were undoubtedly angry because "[t]hey were given, by one government, rights that were used to improve union power and individual incomes. Another government took away some of that power and some of the economic benefits." But "economic downturns suffered by individuals" do not trigger constitutional protection under the Charter, Thackray ruled, dismissing the appeal.

Issue(s): The issues on appeal to the Supreme Court of Canada included whether legislation which voids essential terms of a concluded collective agreement violates s.2(d) of the Charter; whether certain aspects of collective bargaining are protected by the guarantee of freedom of association in s.2(d) of the Charter; and whether legislation which targets the collective agreement of the most female-dominated sector of the economy constitutes a violation of equality rights in s.15 of the Charter, when that legislation is aimed at depressing wages which have been subject to pay equity processes.
                           
Supreme Court's decision (6-1): The appeal was allowed. 

Reasons: The Supreme Court reversed 20 years of its own jurisprudence by ruling that the guarantee of freedom of association in section 2(d) of the Charter of Rights protects the right of Canadian workers to bargain collectively. In a 90-page judgment, authored by Chief Justice Beverley McLachlin and Justice Louis LeBel, the Court breathed new life into section 2(d) of the Charter, explicitly repudiating the restrictive interpretation given to it in 1987, when it was defined by the Court in the so-called "labour trilogy" of cases to mean only the right to join a union, but not to engage in union activities.

I. The Four Propositions

Boldly declaring its conclusion that "section 2(d) of the Charter protects the capacity of members of labour unions to engage, in association, in collective bargaining on fundamental workplace issues," the Supreme Court cites four propositions to support its view:

(1) "First, a review of the section 2(d) jurisprudence of this Court reveals that the reasons evoked in the past for holding that the guarantee of freedom of association does not extend to collective bargaining can no longer stand."

(2) "Second, an interpretation of section 2(d) that precludes collective bargaining from its ambit is inconsistent with Canada's historic recognition of the importance of collective bargaining to freedom of association."

(3) "Third, collective bargaining is an integral component of freedom of association in international law, which may inform the interpretation of Charter guarantees."

(4) "Finally, interpreting section 2(d) as including a right to collective bargaining is consistent with, and indeed, promotes, other Charter rights, freedoms and values."

These four propositions are explained by the Court at greater length, as follows:

(1) 1987 ruling in the labour trilogy cannot stand. The grounds advanced in the "labour trilogy" of cases, decided by the Supreme Court in 1987, "do not withstand principled scrutiny and should be rejected," the Court stated. The Court gives five reasons, as follows: (a) contrary to the trilogy, the rights to strike and bargain are not modern rights created by legislation; they are fundamental rights which go back hundreds of years, and "[t]here is nothing in the statutory entrenchment of collective bargaining that detracts from its fundamental nature"; (b) while judicial deference to government regulation of labour relations may be appropriate, "to declare a judicial 'no go' zone for an entire right on the ground that it may involve the courts in policy matters is to push deference too far"; (c) freedom of association does not permit only those activities performable by an individual, since "some collective activities may, by their very nature, be incapable of being performed by an individual"; (d) while section 2(d) was not intended to protect the "objects" or goals of an association, "'collective bargaining' as a procedure has always been distinguishable from its final outcomes"; (e) the "labour trilogy" took a "decontextualized approach" to freedom of association, overlooking "the importance of collective bargaining … to the exercise of freedom of association in labour relations."
In the Court's view, its Dunmore decision, which in 2001 struck down the exclusion of agricultural workers from labour relations legislation, had opened the door to a reassessment of the "labour trilogy". Dunmore made it clear that a prohibition aimed at a collective, not just an individual, could raise associational concerns, that a more contextual analysis was required, and that access to a statutory regime may be called for where otherwise the freedom to associate would be next to impossible to exercise.

(2) Collective bargaining falls within the scope of section 2(d) of the Charter. Reviewing Canadian labour history at length, the Court concluded that "[a]ssociation for purposes of collective bargaining has long been recognized as a fundamental Canadian right which predated the Charter. While, at least until 1872, Canadian laws, based on repressive British common law and legislation, "cast shadows on the legitimacy of trade unions", the period from 1872 until the 1930s could be characterized as one of tolerance by governments of trade union activities, the positive recognition of trade unions became firmly entrenched in Canada with the passage in 1943 of P.C. 1003 (the Wartime Labour Relations Regulations), which (building on the U.S. Wagner Act of 1935) required employers to bargain with the duly elected representatives of trade unions. Indeed, the Court noted, collective bargaining "emerges historically as the most significant collective activity through which freedom of association is expressed in the labour context." In the early 1980s, during Parliamentary hearings preceding adoption of the Charter, the government explained that it was not necessary to include collective bargaining in section 2(d) of the Charter because "that is already covered in the freedom of association that is already provided …" Thus, the Court stated, "[t]he protection enshrined in section 2(d) of the Charter may properly be seen as the culmination of a historical movement toward the recognition of a procedural right to collective bargaining."

(3) International law supports collective bargaining as a component of freedom of association. Considerable weight was placed by the Court on international law, especially international treaties which Canada has signed, that protect collective bargaining as part of freedom of association. As the Court observed, "the Charter should be presumed to provide at least as great a level of protection as is found in the international human rights documents that Canada has ratified." Besides the UN Covenants on Economic, Social and Cultural Rights and on Civil and Political Rights, the Court singled out Convention No. 87 of the International Labour Organization, which has been interpreted by the ILO to mean that (i) the right to collective bargaining is a fundamental right, which includes a good faith obligation to recognize unions, engage in genuine and constructive negotiations, and respect commitments entered into; and (ii) collective bargaining is a voluntary process, that should be free of interventions by government, save in exceptional situations, following consultations with the unions involved.

(4) Inclusion of collective bargaining in section 2(d) is supported by Charter values. According to the Court, protection of the collective bargaining process under section 2(d) is supported by Charter values, such as "human dignity, equality, liberty, respect for the autonomy of the person, and the enhancement of democracy …" The right to bargain collectively gives workers "the opportunity to influence the establishment of workplace rules and thereby gain some control over a major aspect of their lives, namely their work." Again, "[c]ollective bargaining permits workers to achieve a form of workplace democracy and to ensure the rule of law in the workplace."

II. Scope of section 2(d): What does the right to collective bargaining entail?

Noting that the Charter is designed to protect individuals against state action, including legislation, the Court held that the constitutional right to collective bargaining "concerns the protection of the ability of workers to engage in associational activities, and their capacity to act in common to reach shared goals related to workplace issues and terms of employment." It guarantees "the process through which these goals are pursued. It means that employees have the right to unite, to present demands to ... sector employers collectively and to engage in discussions in an attempt to achieve workplace-related goals. Section 2(d) imposes corresponding duties on government employers to agree to meet and discuss with them. It also puts constraints on the exercise of legislative powers in respect of the right to collective bargaining."

In short, "the state must not substantially interfere with the ability of a union to exert meaningful influence over working conditions through a process of collective bargaining conducted in accordance with the duty to bargain in good faith. Thus, the employees' right to collective bargaining imposes corresponding duties on the employer. It requires both employer and employees to meet and to bargain in good faith, in the pursuit of a common goal of peaceful and productive accommodation."

However, there are limitations. The interference must be "substantial", and the right is to a "process", and "does not guarantee a certain substantive or economic outcome." Moreover, "the right is to a general process of collective bargaining, not to a particular model of labour relations, nor to a specific bargaining method."

To constitute substantial interference with freedom of association, "the intent or effect must seriously undercut or undermine the activity of workers joining together to pursue the common goals of negotiating workplace conditions and terms of employment with their employer that we call collective bargaining. Laws or actions that can be characterized as 'union breaking' clearly meet this requirement. But less dramatic interference with the collective process may also suffice. In Dunmore, denying the union access to the labour laws of Ontario designed to support and give a voice to unions was enough. Acts of bad faith, or unilateral nullification of negotiated terms, without any process of meaningful discussion and consultation, may also significantly undermine the process of collective bargaining. The inquiry in every case is contextual and fact-specific. The question in every case is whether the process of voluntary, good faith collective bargaining between employees and the employer has been, or is likely to be, significantly and adversely impacted.

Substantial interference, the Court ruled, is to be assessed on two bases: (1) "the importance of the matter affected to the process of collective bargaining", and (2) "the manner in which the measure impacts on the collective right to good faith negotiation and consultation." Both are essential. Thus, "[i]f … the changes substantially touch on collective bargaining, they will still not violate section 2(d) if they preserve the process of consultation and good faith negotiation."

With respect to the importance of the matter, the Court observed, "[t]he more important the matter, the more likely that there is substantial interference with the section 2(d) right." The Court gave examples: "Laws or state actions that prevent or deny meaningful discussion and consultation about working conditions between employees and their employer may substantially interfere with the activity of collective bargaining, as may laws that unilaterally nullify significant negotiated terms in existing collective agreements. By contrast, measures affecting less important matters such as the design of uniform, the lay out and organization of cafeterias, or the location or availability of parking lots, may be far less likely to constitute significant interference with the section 2(d) right of freedom of association."

At the heart of collective bargaining, the Court noted, is the duty to negotiate in good faith. While this duty is "essentially procedural" and "does not dictate the content of any particular agreement achieved through collective bargaining," the parties must engage in "meaningful dialogue" and "make a reasonable effort to arrive at an acceptable contract." In effect, under section 2(d) of the Charter, "there subsists a requirement that [legislative] provisions … preserve the process of good faith consultation fundamental to collective bargaining. That is the bottom line."

III. Application of principles to this case

Applying the foregoing principles to the case before it, the Court concluded that parts of the Health and Social Services Delivery Improvement Act (Bill 29) interfered with collective bargaining. In this connection, the Court emphasized that the right to collective bargaining "cannot be reduced to a mere right to make representations." The process of consultation and discussion must be meaningful; if matters cannot be adopted as part of a valid collective agreement, the process of collective bargaining becomes meaningless.

Certain provisions of Bill 29 were deemed not to substantially interfere with collective bargaining. Thus, sections 4 and 5, which dealt with "relatively minor modifications to in-place schemes" for the transfer and reassignment of employees, were considered not to be objectionable, since the central aspects of these provisions were preserved by the Health Sector Labour Adjustment Regulations. Again, sections 7 and 8, which abolished a program and agency giving health sector employees a year of training, assistance and financial support, were regarded as not offensive, since they were not the products of collective bargaining, but of legislation. The same was true for sections 6(3), 6(5) and 6(6), which dealt with the status of employees and the recognition of successor rights, since they simply modified protections available under the Labour Relations Code, and did not deal with entitlements of employees based on collective bargaining.

However, sections 6(2) and 6(4), which gave employers increased power to contract out non-clinical services, by invalidating provisions in collective agreements, including provision requiring consultation, and forbade the incorporation of such provisions in future collective agreements, constituted a substantial interference with section 2(d). So, too, did section 9, which, albeit temporarily, invalidated contractual provisions protecting employees on layoff and bumping. In the Court's view, these provisions "dealt with matters central to the freedom of association", they affected employees' capacity to obtain secure employment and gain employment security, and impacted on seniority, "a protection of significant importance to the union." Moreover, "the measures adopted by the government constitute a virtual denial of the section 2(d) right to a process of good faith bargaining and consultation."

IV. Was the interference with collective bargaining justified as a reasonable limit to Charter rights, by virtue of section 1 of the Charter?

Section 1 of the Charter permits "such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society." In this regard, the Court held that, while the sustainability of the health care system was a pressing and substantial objective of the B.C. government, and there was a rational connection between this objective and the legislative means chosen by the government, the B.C. legislation did not satisfy the requirement that it "minimally impair" the Charter right.

The Court stated: "The record discloses no consideration by the government of whether it could reach its goal by less intrusive measures, and virtually no consultation with unions on the matter … This was an important and significant piece of labour legislation. It had the potential to affect the rights of employees dramatically and unusually. Yet it was adopted with full knowledge that the unions were strongly opposed to many of the provisions, and without consideration of alternative ways to achieve the government objective, and without explanation of the government's choices."

V. No violation of equality rights

The Court concluded that Bill 29 did not violate the guarantee of equality rights in section 15 of the Charter, since it did not target women as such. The Court stated: "The differential and adverse effects of the legislation on some groups of workers relate essentially to the type of work they do, and not to the persons they are." 
 
Date of the Supreme Court's decision: June 8, 2007

Lancaster Reference: For analysis of the Supreme Court's decision, see Lancaster's Human Rights and Workplace Privacy E-Bulletin, August 16, 2007, Issue No. 90.