A-183-77
Professional Institute of the Public Service of
Canada—Aircraft Operations Group (Applicant)
v.
Anti-Inflation Appeal Tribunal (Respondent)
Court of Appeal, Jackett C.J., Pratte and Ryan
JJ.—Ottawa, October 28, 1977.
Judicial review — Public Service — Collective agreement
expired and no new one entered into prior to October 14, 1975
— Treasury Board unilaterally increasing group's salary
Administrator and Anti-Inflation Appeal Board deciding s.
44(1) of Anti-Inflation Guidelines inapplicable — Whether or
not unilateral action constituting "new compensation plan"
within s. 44(1)(a)(ii) — Definition of arrangement found within
definition of "compensation plan" — Anti-Inflation Guide-
lihes, SOR/76-1, ss. 43, 44 as amended by SOR/76-298 —
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
This is a section 28 application to set aside an Anti-Inflation
Appeal Tribunal's decision dismissing applicant's appeal from
an order of the Administrator under the Anti-Inflation Act
holding section 44(1) of the Anti-Inflation Guidelines inappli
cable. Applicant's collective agreement expired July 27, 1975
and was not replaced prior to October 14, 1975. Section 44(1)
would apply unless unilateral action by Treasury Board
increasing salary for the group is considered a "new compensa
tion plan" within the meaning of section 44(1)(a). This appeal
is to decide whether or not Treasury Board's action resulted in
a "new compensation plan".
Held, the application is allowed. When the definition of
"compensation plan" that is applicable to the part of the Act
containing section 44 is read with the definition of its French
equivalent "régime de rémunération", the word "arrangement"
found in the English definition must be given the sense of an
agreement duly arrived at between agreeing parties, and does
not include unilateral arrangements made by one party even
though it benefits the other party. Treasury Board's unilateral
action did not constitute or make the existing contract consti
tute a "new compensation plan". As no ambiguity exists as to
the meaning of the word arrangement, it is not permissible to
resort to the assumed intent of section 44(1)(a).
APPLICATION for judicial review.
COUNSEL:
John D. Richard, Q.C., for applicant.
E. A. Bowie for respondent.
SOLICITORS: •
Gowling & Henderson, Ottawa, for applicant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is a section 28 application to
set aside a decision of the Anti-Inflation Appeal
Tribunal dismissing an appeal by the applicant
from an order of the Administrator under the
Anti-Inflation Act, S.C. 1974-75-76, c. 75, ruling
that the maximum permissible rate of increase in
average compensation for the Aircraft Operations
Group for certain "Guideline Years" was $2,400
per year by virtue of section 43(1)(b) of the
"Guidelines" established under that Act.'
It is common ground that the Administrator's
order was right unless he erred in holding that
section 44(1) was not applicable in the particular
case. The question raised by this section 28
application is whether the Appeal Tribunal erred
in law in not holding that that subsection was
applicable in so far as it reads as follows:
44. (1) Where a group
(a) in respect of which
(i) a compensation plan entered into or established on or
before January 1, 1974, expired prior to October 14, 1975,
and
(ii) a new compensation plan was not entered into or
established prior to October 14, 1975, ...
' The relevant part of section 43(1) reads as follows:
43. (1) Subject to subsection (2) and section 44, an
employer shall not in any guideline year increase the total
compensation of all the employees in a group, in relation to
the total compensation of all the employees in the group in
the base year, by an amount that results
(b) in an increase in the average compensation for the group
for the guideline year that is greater than twenty-four hun
dred dollars,
the employer may in a guideline year increase the total amount
of the compensation of all the employees in the group, by an
amount that is not greater than the sum of
(c) the amount permitted under subsection 43(1), and
(d) such further amount as is consistent with the objectives
of the Act.
There is no dispute about the following facts:
1. on or before January 1, 1974, the applicant,
as certified bargaining agent for the bargaining
unit, entered into a collective agreement with
the Treasury Board for a term expiring July 27,
1975; and
2. no collective agreement, as such, was entered
into by the parties, prior to October 14, 1975, to
replace such collective agreement.
It follows that the conditions precedent set out
in section 44(1)(a) to the application of section
44(1) had been satisfied unless a "new compensa
tion plan", within the meaning of section
44(1)(a)(ii), had been entered into by virtue of the
facts set out in paragraphs 6 and 7 of Part I of the
applicant's memorandum (which facts are admit
ted by paragraph 3 of the respondent's memoran
dum). Those paragraphs read as follows:
6. On May 1, 1974, the Government of Canada announced,
through the President of the Treasury Board, "that the govern
ment has authorized an increase in pay ranges of $500 which
will have the effect of increasing the annual rate of compensa
tion by this amount as of April 1, 1974, for all its employees,
including members of the R.C.M.P., and the Armed Forces,
and excepting those in groups where notice to bargain has been
given but no settlement has yet been reached and those in
groups in respect of which an arbitral award was rendered or a
settlement reached after April 1, 1974, the effective date of this
general increase."
7. The President of the Treasury Board stated that "the gov
ernment has concluded that it is inappropriate to deal with this
development only through the process of collective bargaining
as agreements come up for renewal. Instead, special action is
required in order to ensure that the pay levels of public servants
will maintain their relative positions with those of persons
performing similar work outside the Public Service."
The question that has to be decided on this appeal
is, therefore, whether the unilateral action of Trea
sury Board, whereby rates of pay of members of
the bargaining group were increased, resulted in a
"new compensation plan" having been entered into
or established within the meaning of section
44(1) (a)(ii).
For the purposes of Part 4 of the "Guidelines"
(in which section 44 is contained), "compensation
plan" is defined to mean
an arrangement for the determination and administration of
the compensation of employees
and the French equivalent of that term—régime
de rémunération—is defined to mean
une entente visant la détermination et l'administration de la
rémunération d'employés;
In my view, reading the definition of the French
expression with the definition of the English
expression, the word "arrangement" must be given
the sense of an agreement duly arrived at between
agreeing parties and does not include a unilateral
arrangement made by one party even though such
arrangement benefits the other party. On that
view, the unilateral action by Treasury Board did
not, in itself, constitute a "new compensation
plan" and did not have the effect of making the
existing collective agreement read with the unilat
eral action a "new compensation plan". That being
so, it cannot, in my view, be said that a "new
compensation plan" was "entered into or estab
lished" (conclu ou établi) at the time when the
unilateral action was taken.
I have not overlooked the reasons given on
behalf of the Appeal Tribunal. As I read them, the
gist of the reasoning by which it reached its con
clusion on this branch of the matter is to be found
in the following paragraphs:
We will deal first with the first and third grounds of appeal
which relate to paragraph 44(1)(a) of the Anti-Inflation Regu
lations; the issue of whether the Aircraft Operations Group had
a pre-1974 compensation plan on October 14, 1975. In our
opinion they did not, because the $500 increase in pay ranges
effected by the Treasury Board as of April 1, 1974, resulted in
"a new compensation plan" as that term is defined by section
38 of the Guidelines. "Compensation plan" is defined as
An arrangement for the determination and administration of
the compensation of employees.
The Appellant submitted that this unilateral increase in pay
by the Treasury Board did not constitute a new compensation
plan because in the context of a collective bargaining relation
ship "a new compensation plan" would have to be a negotiated
plan. We are unable to accept this submission. If the legislators
had meant to require a new agreement they could have used the
word "agreement" rather than "arrangement" in paragraph
44(1)(a) of the Guidelines. That provision of the Guidelines is
obviously intended to cover a broad range of employers, those
with collective bargaining relationships and those who deal
individually with their employees. To cover the latter the term
"compensation plan" must include within its scope "arrange-
ments" unilaterally imposed by employers, and the term cannot
mean one thing with regard to part of the population of
employers to which it applies and another with regard to the
rest.
As already indicated, when the English version
is read with the French version, there is, in my
opinion, no ambiguity as to the meaning of the
word "arrangement" in the definition of "compen-
sation plan". It is not, therefore, in my view,
permissible to resort to the assumed intent of
section 44(1) (a) to resolve an ambiguity because
no ambiguity exists. Furthermore it is not as clear
as is suggested that an arrangement for the deter
mination and administration of "the compensation
of employees" was intended "to cover ... employ
ers ... who deal individually with employees".
Finally, in the absence of circumstances that do
not occur to me, I fail to envisage a case in which
"a new compensation plan" can be established
when dealing individually with an employee other
wise than by agreement between the employer and
the employee.
I am further of the view that the fact that the
additional payments were accepted by the mem
bers of the group cannot be taken as evidence that
there was an implied agreement by their certified
bargaining agent to a new agreement "for the
determination and administration" of their
compensation. 2 The inclusion of a bonus or supple
ment to the agreed upon compensation in the
cheques for payment of the compensation and the
acceptance of cheques for such larger amount does
not give rise, in my view, to a new collective
agreement between the bargaining agent and the
employer that would be binding on either the
employees or the employer.
2 Cf. sections 2 and 40(1) of the Public Service Staff Rela
tions Act.
For the above reasons, I am of the view that the
decision of the Appeal Tribunal should be set aside
and that the matter should be referred back to the
Appeal Tribunal for disposition on the basis that,
on the facts of the particular matter, the require
ments of section 44(1) (a) had been complied with.
PRATTE J. concurred.
RYAN J. concurred.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.