Judgments

Decision Information

Decision Content

T-9206-82
Public Service Alliance of Canada (Plaintiff) v.
The Queen in right of Canada as represented by Treasury Board and Attorney General of Canada (Defendants)
Trial Division, Reed J.-Ottawa, February 20 and March 21, 1984.
Public service - Public Sector Compensation Restraint Act - Whether Act denying freedom of association guaranteed by Charter - Whether rights to bargain and strike protected by freedom of association - Whether Charter s. 7 right to liberty including liberty to bargain terms and conditions of employ ment; if so, whether such right denied by Act and whether denial contrary to principles of fundamental justice Assuming Charter right or freedom infringed, whether reason able limit demonstrably justified in free and democratic socie ty - Whether Act depriving plaintiff of enjoyment of property without due process, contrary to Bill of Rights s. 1(a) Whether Act denying equality before law and protection of law, contrary to Bill of Rights s. 1(b) - Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 1, 2(d), 7, 8, 9, 10, 12, 33 - Public Sector Compensa tion Restraint Act, S.C. 1980-81-82-83, c. 122, ss. 2(1), 4(1)(a),(b), 5, 6, 7, 8(1), 9(1),(2), 10, 16 - Public Service Staff Relations Act, R.S.C. 1970, c. P-35, ss. 49(2)(b), 63, 77, 101 - Canadian Bill of Rights, R.S.C. 1970, Appendix III, s. 1(a),(b) - Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II, No. 5] (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1), ss. 91, 92.
Anti-inflation - Public Sector Compensation Restraint Act - Whether Act denying freedom of association guaranteed by Charter - Whether rights to bargain and strike protected by freedom of association - Whether Charter s. 7 right to liberty including liberty to bargain terms and conditions of employ ment; if so, whether such right denied by Act and whether denial contrary to principles of fundamental justice Assuming Charter right of freedom infringed, whether such infringement reasonable limit demonstrably justified in free and democratic society - Whether Act depriving plaintiff of enjoyment of property without due process of law, contrary to Bill of Rights s. 1(a) - Whether Act denying equality before law and protection of law, contrary to Bill of Rights s. 1(b) - Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 1, 2(d), 7, 8, 9, 10, 12. 33 - Public Sector Compensation Restraint Act, S.C. 1980-81-82-83, c. 122, ss. 2(1), 4(1)(a),(b), 5, 6, 7, 8(1), 9(1),(2), 10, 16 - Public Service Staff Relations Act, R.S.C. 1970, c. P-35, ss. 49(2)(b), 63, 77,
101 — Canadian Bill of Rights, R.S.C. 1970, Appendix III, s. 1(a),(b) — Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II, No. 51 (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1), ss. 91, 92.
Labour relations — Constitutional law — Charter of Rights — Freedom of association — Not extending to freedom to bargain collectively and to strike — Ontario Divisional Court judgment in Broadway Manor Nursing Home case not fol lowed — "Liberty" in Charter s. 7 concerning physical liberty of person, not including freedom of contract — That future wage hikes rolled back by legislation not deprivation of prop erty without due process contrary to Bill of Rights — Right to future increases under collective agreement not vested property right — Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 2(d), 7 — Canadian Bill of Rights, R.S.C. 1970, Appendix III, s. 1(a),(b).
Constitutional law — Charter of Rights — Freedom of association — Whether Public Sector Compensation Restraint Act infringing freedom — Whether right to bargain and strike protected by Charter freedom of association — Whether inter national covenants acceded to by Canada protecting right to strike and, if so, whether such right necessarily incorporated in Charter — Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 2(d), 7 — Public Sector Compen sation Restraint Act, S.C. 1980-81-82-83, c. 122 — Public Service Staff Relations Act, R.S.C. 1970, c. P-35.
Constitutional law — Charter of Rights — Limitation clause — Assuming plaintiffs Charter freedom of association denied by Public Sector Compensation Restraint Act, whether abridgment reasonable limit demonstrably justified in free and democratic society — Determination of reasonableness neces sarily involving assessment of economic benefit to society, against cost of infringement to individuals — Benefit to society as whole not sufficiently substantial to justify abridgement of constitutionally guaranteed individual rights — Words "demonstrably justified" requiring more than reasonable rationale — Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1981, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 1, 2 — Public Sector Compensa tion Restraint Act, S.C. 1980-81-82-83, c. 122.
Constitutional law — Charter of Rights — Right to liberty — Whether right to "liberty" in s. 7 including freedom to enter into contracts relating to terms of employment — Freedom to contract, being economic right, not included in concept of "liberty" — S. 7 concerned with physical liberty of person, right to dispose of own body, of own person — "Principles of fundamental justice" in s. 7 used in procedural, not substan tive sense — Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 1, 2 — Public Sector Compensa tion Restraint Act, S.C. 1980-81-82-83, c. 122.
Canadian Bill of Rights — Enjoyment of property — Whether Public Sector Compensation Restraint Act depriving plaintiff of enjoyment of property without due process of law — Right to wage increase under collective agreement not vested and enforceable property right — "Due process of law" in s. 1(a) used in procedural, not substantive sense — Due process clause not applicable to protect property rights affect ed by federal expropriation and nationalization laws — Canadian Bill of Rights, R.S.C. 1970, Appendix III, s. 1(a) — Public Sector Compensation Restraint Act, S.C. 1980-81-82- 83, c. 122.
Canadian Bill of Rights — Equality before law — Whether infringed by Public Sector Compensation Restraint Act as civil servants allegedly singled out in capricious and arbitrary manner — Employer-employee relationship between govern ment and union sufficient for Act to meet test of "valid federal objective" as used in case law — Canadian Bill of Rights, R.S.C. 1970, Appendix III, s. 1(b) — Public Sector Compen sation Restraint Act, S.C. 1980-81-82-83, c. 122 — Constitu tion Act, 1867, 30 & 31 Via., c. 3 (U.K.) [R.S.C. 1970, Appendix II, No. SJ (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1), ss. 91, 92.
Evidence — Explanations of Minister sponsoring Bill before Joint Parliamentary Committee — Weight to be given to such comments.
In 1982, the Parliament of Canada adopted the Public Sector Compensation Restraint Act by which collective agree ments in the public sector were extended for a period of two years. The Act rolled back wage increases in the agreements to 6% for the first year and provided for an increase of 5% for the second year. Since the Public Service Staff Relations Act prohibits strikes when a collective agreement is in force, the right to strike was therefore abrogated for the period of exten sion. The Public Sector Compensation Restraint Act also per mitted changes to collective agreements, but only if agreed to by the Treasury Board or the Governor in Council.
The plaintiff seeks a declaration that the Act is invalid as inconsistent with the Charter of Rights or that it is inoperative as inconsistent with the Bill of Rights. More precisely, the
contention is that the Act deprives the plaintiff and its mem bers of (a) the fundamental freedom of association guaranteed by section 2 of the Charter; (b) the liberty to bargain their terms and conditions of employment, contrary to the principles of fundamental justice, in violation of section 7 of the Charter; (c) the enjoyment of property without due process of law, contrary to paragraph 1 (a) of the Bill of Rights; (d) equality before the law and of protection of the law, contrary to paragraph 1(b) of the Bill of Rights.
Held, the action should be dismissed.
Even though the Act provides for the possibility of making changes to collective agreements, the right to collective bar gaining cannot be said to be preserved since there is no right to collectively withdraw services. As for the argument that the right to collective bargaining is not destroyed, but merely suspended for a certain period, the fact is that a suspension is a denial for a certain period. While the right to collective bar gaining, if constitutionally entrenched, would not carry with it a duty on the employer to bargain in good faith or the right to have operating all the mechanisms of arbitration and concilia tion of the Public Service Staff Relations Act, it would, in spite of a Minister's comments to the contrary before a Joint Parlia mentary Committee, carry with it the right to strike.
The plaintiff's arguments to the effect that the freedom to bargain is encompassed by the concept of freedom of associa tion are heavily based on the Broadway Manor case. In that case, the judge relied on the Minister's interpretation of that concept. Ministers' comments before Parliamentary Commit tees should not be given too much weight: they have an advocacy character and are meant to convince the members of those committees. Secondly, the judge found that the history of freedom of association at common law encompassed a right to bargain collectively and strike, but the cases relied on only deal with the history of the right to strike. Thirdly, it was found that international covenants to which Canada has acceded protect this right. Most of the conventions do not expressly mention the right to strike, but even if some do, that does not mean that the Charter of Rights intended to incorporate all rights contained in those conventions. The fourth argument is that if the pur poses for which an association is organized are not protected by the right to freedom of association, there is a danger that the freedom itself can be undercut. However, there is nothing in Anglo-Canadian or American case law or in the international law context which would lead to the conclusion that the use of the term "freedom of association" is meant usually to include a freedom to bargain. Furthermore, it would not have been intended in a section of the Charter dealing with fundamental rights to include a right that is essentially economic in nature without some more express wording. "Freedom of association" guarantees unions, inter alia, the right to join together, to solicit members and to advocate their views, but not the right to strike.
In view of this conclusion, it would not be necessary to examine whether the Act is a reasonable limit demonstrably justified in a free and democratic society within the meaning of section 1 of the Charter. But since this case was expected to be appealed, the evidence and arguments on this point were reviewed. While the determination of whether the Act is a "reasonable limit" is not an economic question, economic evi dence may well be a starting point in a case such as this. There must be an assessment of the economic benefit to society against the cost of the infringement to individuals. At the time, it was a reasonable economic judgment to have concluded that inflation was a problem which needed government intervention. But the evidence is clear that monetary policy and not wage- price controls is the primary tool by which to combat inflation. The evidence clearly indicates that the decline in inflation was due to the world recession and not the government's 6 and 5 program. It seems reasonable to conclude that it played little part in the reduction of inflation. The Act was designed to have a demonstrative effect, not to serve as a direct economic lever to combat inflation. At most, it seems to have been conceived to create some psychological effects, some dampening of expecta tions. Such a measure would not meet the test of section 1 of the Charter. If freedom to bargain collectively was a constitu tionally guaranteed right, the Restraint Act would not be a "reasonable limit ... demonstrably justified". The test is more than the requirement that the legislation have a reasonable rationale. If that were the case, there would be no scope left for section 33. While the test may vary from case to case, it must be very substantial, and in this case the benefit accruing to society is not sufficiently substantial to justify an abridgment of constitutionally guaranteed individual rights.
In arguing that the Act was contrary to the principles of fundamental justice because of its discriminatory nature, coun sel raised the issue of whether section 7 of the Charter extends to substantive due process. Upon examination of case law and the leading Canadian texts on the question, the better view seems to be that section 7 relates only to procedural fairness. In any event, the term "liberty" in section 7 does not encompass freedom of contract. Section 7 is concerned with physical liberty of the person, the right to dispose of one's own body, of one's person.
The argument that the persons whose prospective wage increases under collective agreements were rolled back by the Act were deprived of property without due process of law, in violation of paragraph 1(a) of the Bill of Rights, is without foundation. A right to a wage increase at a future date under an existing collective agreement is not a property right vested and enforceable. In any event, "without due process of law" has not been interpreted as including substantive due process.
It is also argued that the right of the individual to equality before the law recognized in paragraph 1(b) of the Bill of Rights has been violated because the Act singles out federal civil servants for restrictive treatment without rational grounds. The issue is whether the Act meets the test of a "valid federal
objective". In this case, the employer-employee relationship between the government and those challenging the Act is such as to constitute a sufficient justification to meet that test as defined in case law.
CASES JUDICIALLY CONSIDERED
APPLIED:
Minister of Home Affairs v. Fisher, [1980] A.C. 319 (P.C.); Attorney-General of Fiji v. Director of Public Prosecutions, [1983] 2 W.L.R. 275 (P.C.); The Queen v. Bowen, judgment dated November 10, 1983, Ontario High Court, not yet reported; Re Alberta Union of Provincial Employees et al. and the Crown in right of Alberta (1980), 120 D.L.R. (3d) 590 (Alta. Q.B.); Col- lymore v. Attorney-General, [1970] A.C. 538 (P.C.); Hanover Tp. Federation of Teachers, Local 1954 (AFL- CIO) v. Hanover Community School Corp. C.A.Ind., 457 F.2d 456 (1972) (7th Cir.); Smith v. Arkansas State Highway Employees, 441 U.S. 463 (1979) (8th Cir.); Dolphin Delivery Ltd. v. Retail, Wholesale and Dept. Store Union, Loc. 580, [1984] 3 W.W.R. 481 (B.C.C.A.); R. v. Hayden, [1983] 6 W.W.R. 655 (Man. C.A.); Re Mason; Mason v. R. in Right of Can. (1983), 35 C.R. (3d) 393 (Ont. S.C.); The Queen v. Drybones, [1970] S.C.R. 282; Attorney-General of Canada v. Lovell, [1974] S.C.R. 1349; R. v. Burnshine, [1975] 1 S.C.R. 693; Prata v. Minister of Manpower and Immigration, [1976] 1 S.C.R. 376; MacKay v. The Queen, [1980] 2 S.C.R. 370.
NOT FOLLOWED:
Re Service Employees' International Union, Local 204 and Broadway Manor Nursing Home, et al. and two other applications (1983), 44 O.R. (2d) 392; confirmed on appeal: 1086-83, judgment dated October 22, 1984, Ontario Court of Appeal, not yet reported.
DISTINGUISHED:
Crofter Hand Woven Haris Tweed Co., Ltd. v. Veitch, [1942] 1 All E.R. 142 (H.L.); C.P.R. v. Zambri, [1962] S.C.R. 609; 34 D.L.R. (2d) 654.
CONSIDERED:
Schmidt and DahlstrOm v. Sweden (1976), 1 E.H.R.R. 632 (Eur. Court H.R.); Reference re Section 94(2) of the Motor Vehicle Act (1983), 147 D.L.R. (3d) 539 (B.C.C.A.); R. v. Stevens (1983), 145 D.L.R. (3d) 563 (Ont. C.A.); Duke v. The Queen, [1972] S.C.R. 917.
REFERRED TO:
Allman et al. v. Commissioner of the Northwest Territo ries (1983), 44 A.R. 170 (N.W.T.S.C.); Edwards v. Attorney-General of Canada, [1930] A.C. 124 (P.C.); British Coal Corporation v. The King, [1935] A.C. 500 (P.C.); Attorney-General for Ontario and Others v.
Attorney-General for Canada and Others and Attorney- General for Quebec, [1947] A.C. 127 (P.C.); Attorney- General of Quebec v. Blaikie et al., [1979] 2 S.C.R. 1016; Law Society of Upper Canada v. Skapinker, [1984] 1 S.C.R. 357, reversing (1983), 40 O.R. (2d) 481 (C.A.); Curr v. The Queen, [ 1972] S.C.R. 889.
COUNSEL:
Maurice W. Wright, Q.C. and Peter W. Hogg, Q.C. for plaintiff.
Eric A. Bowie, Q.C. and Robert Cousineau for defendants.
SOLICITORS:
Soloway, Wright, Houston, Greenberg, O'Grady, Morin, Ottawa, for plaintiff.
Deputy Attorney-General of Canada for defendants.
The following are the reasons for judgment rendered in English by
REED J.: This is a claim for a declaration that the Public Sector Compensation Restraint Act (S.C. 1980-81-82-83, c. 122) is invalid as incon sistent with the Canadian Charter of Rights and Freedoms (Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, c. 11 (U.K.)), or is inoperative as inconsistent with the Canadian Bill of Rights (S.C. 1960, c. 44 [R.S.C. 1970, Appen dix III]).
More precisely the plaintiff claims that the Public Sector Compensation Restraint Act deprives the plaintiff and the federal public ser vants whom it represents of
(a) the fundammental freedom of association contrary to section 2 of the Canadian Charter of Rights and Freedoms;
(b) the liberty to bargain their terms and condi tions of employment contrary to the principles of fundamental justice as provided in section 7 of the Canadian Charter of Rights and Freedoms;
(c) the enjoyment of property without due pro cess of the law contrary to paragraph 1(a) of the Canadian Bill of Rights; and
(d) equality before the law and of protection of the law contrary to paragraph 1(b) of the Canadian Bill of Rights.
The plaintiff is an "employee organization" within the meaning of the Public Service Staff Relations Act, (R.S.C. 1970, c. P-35). It has approximately 180,000 members of whom approxi mately 168,000 are federal public servants.
Public Service Compensation Restraint Act
For the purposes of this action evidence was given of the effect the Public Sector Compensation Restraint Act had on five groups of employees for whom the plaintiff is certified as bargaining agent: the clerical and regulatory group (CR) in the administrative support category; the education group (ED) in the scientific and professional cate gory; the education support group (EU) in the technical category; the administrative services group (AS) in the administrative and foreign ser vices category; the program administration group (PM) of the administrative and foreign service category.
The first three groups all had collective agree ments in existence at the date the Public Sector Compensation Restraint Act became effective. That Act was assented to August 4, 1982 but its effective date was June 29, 1982.
The collective agreement applicable to the CR group was for a two-year period which would have expired January 11, 1984. It provided for, among other things, an increase in wages of 12 to 12 1 / 4 % effective December 12, 1982. The collective agree ments applicable to the ED and EU groups were both for two-year periods to expire August 31, 1983. They provided for, among other things, increases in wages of a similar order effective September 1, 1982.
The Public Sector Compensation Restraint Act extended the life of collective agreements in force on June 29, 1982. The extension was for a two- year period from the date of the next wage increase contemplated in the respective agree ments (that is from December 12, 1982 for the CR
group and from September 1, 1982 for the ED and EU groups). Also, the Act "rolled back" the wage increases in the agreement to 6% for the first year and provided for an increase of 5% for the second year to which the agreement had been extended.
4. (1) Every compensation plan that is in effect on June 29, 1982 for employees to whom this Part applies, including every compensation plan extended under section 5, shall be extended for the period of twenty-four months
(a) from the day on which the first increase in wage rates on or after June 29, 1982 would, but for section 8, occur under the compensation plan; or
(b) where no increase in wage rates is to occur under the compensation plan on or after June 29, 1982, from the day immediately following the day on which the compensation plan would, but for this section, expire.
8. (1) Notwithstanding any other Act of Parliament, any provision of a compensation plan for employees to whom this Part applies that provides for an increase in wage rates for the employees on or after June 29, 1982 shall be of no effect.
9. (1) Notwithstanding any other Act of Parliament, every compensation plan for employees to whom this Part applies shall be deemed to include a provision to the effect that
(a) wage rates in effect under the plan
(i) on the day the plan would, but for section 4, expire, or
(ii) on the day immediately prior to the day on which the first increase in wage rates on or after June 29, 1982 would, but for section 8, occur under the plan,
as the case may be shall be increased for the twelve month period immediately following that day
(iii) in the case of a collective agreement or an arbitral award, by six per cent, and
(iv) in any other case, by not more than six percent;
and
(b) wage rates in effect under paragraph (a) shall be increased for the twelve month period immediately following the period referred to in that paragraph
(i) in the case of a collective agreement or an arbitral award, by five percent, and
(ii) in any other case, by not more than five per cent.
(2) For the purposes of subparagraph 1(a)(ii), the first increase in wage rates on or after June 29, 1982 that would, but for section 8, occur under a compensation plan that is deemed under subsection 4(2) to be in effect on that date shall be deemed to be the first increase in wage rates that occurs after any increase in wage rates that occurs on the day the plan comes into effect.
Neither the AS nor the PM groups were covered by collective agreements on June 29, 1982. The agreements previously applicable to them had expired June 20, 1982. On June 18, 1982 the plaintiff on behalf of the AS group had requested the establishment of an arbitration board pursuant to section 63 of the Public Service Staff Relations Act to resolve the outstanding differences respect ing a new collective agreement. On July 8, 1982 an arbitration board was established but no hearings on the merits were held before August 4, 1982, the date of the passage of the Restraint Act.
The plaintiff, on behalf of the PM group, had been involved in bargaining with the employer during the summer of 1982. Notice to bargain, pursuant to paragraph 49(2)(b) of the Public Ser vice Staff Relations Act had been given April 21, 1982. On September 16, 1982 the plaintiff, on behalf of the PM group, asked that a conciliation board be established pursuant to section 77 of the Public Service Staff Relations Act.
For groups not covered by collective agreements on June 29, 1982, the Restraint Act extended the life of the expired agreement for a year from its expiry date (from June 20, 1982 for the AS and PM groups) allowed for a wage increase of no more than 9% for that year.
5. (1) Subject to subsection (2), where a compensation plan for employees to whom this Part applies would, but for this subsection, have expired before June 29, 1982 and no new compensation plan was established before that date, or on or after that date in accordance with subsection 4(2), the compen sation plan shall be extended
(a) where the compensation plan would have expired on or after June 29, 1981, for the twelve month period immediately following the day the plan would have expired; or
(b) where the compensation plan would have expired before June 29, 1981, until June 29, 1982.
(2) A compensation plan for management employees that would, but for this subsection, have expired before June 29, 1982 shall be extended until June 30, 1982.
10. A compensation plan that is extended under subsection 5(1) shall be deemed to include a provision to the effect that wage rates in effect under the plan on the day the plan would, but for subsection 5(1), have expired shall be increased
(a) in the case of the compensation plan referred to in paragraph 5(1)(a), for the twelve month period referred to in that paragraph by not more than nine per cent; and
(b) in the case of a compensation plan referred to in para graph 5(1)(b),
(i) for the period immediately preceding June 29, 1981, by such amounts as the Treasury Board may authorize, and
(ii) for the period commencing on June 30, 1981 and ending on June 29, 1982, by not more than nine per cent.
The Act then extended these agreements for a further two years (i.e. from June 20, 1983 for the AS and PM groups) with a wage increase of 6% for the first of these two years and a wage increase of 5% for the second.
The extension for the further two years is pro vided for by subsection 4(1) (supra). It applies to compensation plans in effect on June 29, 1982 including compensation plans extended under section 5.
Needless to say, the settling of disputes, arising in the negotiation of new collective agreements, by means of a binding decision of an arbitration board, or by means of non-binding recommenda tions through a conciliation process, was no longer possible. Thus the arbitration board which had been established to deal with the outstanding issues concerning the AS group rendered a deci sion on August 31, 1982 stating that it was no longer authorized to determine the matters in dis pute between the parties. The conciliation board asked to consider the outstanding issues respecting the PM group rendered a similar decision on Octo- ber 6, 1982.
Indeed the role of these bodies with respect to collective bargaining is implicitly overridden by section 6 of the Restraint Act:
6. (1) Notwithstanding any other Act of Parliament except the Canadian Human Rights Act but subject to this section and section 7, the terms and conditions of
(a) every compensation plan that is extended under section 4 or 5, and
(b) every collective agreement or arbitral award that includes such a compensation plan,
shall, subject to this Part, continue in force without change for the period for which the compensation plan is extended.
(2) The Treasury Board may authorize any change to any terms and conditions, including any increase in wage rates of not more than nine per cent,
(a) of a compensation plan that would, but for section 5, have expired before June 29, 1982; or
(b) of a collective agreement or arbitral award that includes such a compensation plan.
(3) The Treasury Board may change any terms and condi tions, including any increase in wage rates of not more than nine per cent,
(a) of a compensation plan that would, but for section 5, have expired before June 29, 1982; or
(b) of a collective agreement or arbitral award that includes such a compensation plan,
where the parties to the plan fail to agree to change those terms and conditions.
(4) Nothing in this section affects any work sharing agree ment that has been approved for the purposes of section 37 of the Unemployment Insurance Act, 1971.
(5) Employees or groups of employees whose salary range as of June 29, 1982 has a maximum that equals or exceeds forty-nine thousand five hundred dollars shall not, for the twenty-four month period during which their compensation plan is extended under section 4, be entitled to the merit increases, incremental increases or performance awards that would, but for this subsection, form part of their compensation plan.
During the existence of the restraint period Treasury Board was given the authority to make changes to collective agreements or compensation plans. Also, it should be noted that section 101 of the Public Service Staff Relations Act prohibits strikes during the continuance of a collective agreement. Section 6 of the Restraint Act contin ues not only the terms and conditions of the com pensation plan part of a collective agreement, but also "the terms and conditions of ...(b) every collective agreement ... that includes such a com pensation plan...." Thus, by extending the life of collective agreements for two years, and in some cases more, the Act removed the right to strike during that period.
Thus, the plaintiff argued the Restraint Act destroyed collective bargaining.
Evidence was given showing instances in which collective agreements covering employees never before covered by any collective agreement were negotiated, several instances in which changes to
the non-compensation terms and conditions of col lective agreements had occurred, and instances in which new compensation plans were negotiated and approved by the Governor in Council pursuant to section 16 of the Restraint Act.
In the first category mentioned above, the negotiation of completely new collective agree ments were negotiated with small groups of employees: the janitorial and maintenance employees of the National Arts Centre and some non-public funds employees working in certain military messes. The first of these groups had indeed gone on strike for three days in the course of negotiating the collective agreement.
The second category of negotiations mentioned above included a two-year agreement negotiated by the Professional Institute of the Public Service of Canada for the home economists group whereby wage increases for the first year were 5.6%, and for the second year 5%. Other compensation items e.g., improved vacation leave, were included in the package so that the total compensation cost would remain within the 6% and 5% parameters estab lished by the Act. Similarly, an agreement cover ing Air Canada's printing bureau employees pro vided for a 5.5% wage increase for the first year, a 5% increase for the second year but improved vacation leave benefits, etc. were also included. These settlements and three others of a compa rable nature were negotiated pursuant to section 16 of the Restraint Act:
16. The Governor in Council may, by order, terminate the application of this Act in respect of an employee or a group of employees to which this Act applies.
Section 16 was added as an amendment to Bill C-124, which eventually became the Restraint Act, and its purpose was explained by the Presi dent of Treasury Board as follows:
It is important, Mr. Johnston said, that the parties have as much leeway as possible within the limits of the legislation to work out their own arrangement. For that reason the wording of the amendment has been made deliberately simple to allow for a variety of arrangements. If the parties voluntarily agree to use, say, one-half of one percent of the 6 percent allowable wage rate increase to introduce a paid maternity leave provision in their agreement, and the remaining 5.5 percent to adjust wage rates, and divide up the second year's 5 percent in a
somewhat similar way, then they will be found to be in keeping with the spirit and intent of the legislation. Once the Governor in Council is satisfied that their compensation plan for the two years of application of the restraint program is in keeping with the limits of the legislation, it would be allowed to terminate the application of the legislation for that group of employees. [Part of a press release quoted in a letter dated September 22, 1982 sent by the defendant to the plaintiff.]
In the third category mentioned above were changes to three or four collective agreements allowing for a compressed work week. Also, there were changes to collective agreements providing for the incorporation therein of pre-existing health and safety standards; the standards thereby became enforceable against the employer through the grievance procedure of the Public Service Staff Relations Act while previously they could only have been enforceable against the employer by instituting an action in tort in the courts. In addition, evidence was given that in one instance a ship's crew had been brought under new terms and conditions of employment because a vessel (The Sir Humphrey Gilbert) was being taken out of service and another (The Bartlett) was substituted therefor.
Needless to say, counsel for the plaintiff and counsel for the defendants characterized this evi dence in diametrically opposite ways. Counsel for / the plaintiff characterized it as demonstrating that negotiations which were still possible were essen tially "de minimis" in nature. Counsel for the defendants characterized it as demonstrating that meaningful collective bargaining could still exist.
As I indicated to counsel, while evidence as to what negotiations actually took place may be help ful for illustrative purposes, the extent to which bargaining actually took place under or outside the Act is probably not too relevant. The issue, rather, is the extent to which such bargaining was allowed by the terms of the statute, or outside the statute; the issue is essentially one of statutory construc tion.
As noted above, the Act does not cover employees not previously covered by a collective bargaining agreement. Counsel for the plaintiff argued that this was an oversight in the drafting of
the Act. Be that as it may, given the wide scope of the Act, I do not think that the exclusion of this small group, be it advertant or inadvertant, changes the essential character of the disputed legislation.
Secondly, counsel for the defendants argues that collective bargaining with respect to compensation items is still possible, with the approval of the Governor in Council, through the mechanism of section 16. I have considerable difficulty with the idea that allowing for change by approval of the Governor in Council preserves collective bargain ing. The Governor in Council is not even the employer although Treasury Board, a committee of Council, is.
Counsel for the defendants argues that collective bargaining, with respect to non-compensation mat ters, is still possible pursuant to section 7:
7. The parties to a collective agreement, or the persons bound by an arbitral award, that includes a compensation plan that is extended under section 4 may, by agreement, amend any terms and conditions of the collective agreement or arbitral award other than wage rates or other terms and conditions of the compensation plan.
What is a non-compensation item was the sub ject of some disagreement and uncertainty. But, it should be noted that "compensation" is defined by the Act, subsection 2(1), as
... all forms of pay, benefits and perquisites paid or provided, directly or indirectly, by or on behalf of an employer to or for the benefit of an employee; [Underlining added.]
This is a very broad definition. It was interpret ed by Treasury Board in a letter dated September 29, 1982 as including: pay, vacation leave, hol idays, hours of work, rest periods, overtime includ ing meal allowance, transportation reimbursement, leave for staff relations matters, acting pay, sick leave, marriage, bereavement or court leave, injury-on-duty leave, maternity leave, leave for family related responsibilities, education and career development leave, severance pay. The most significant conditions of employment not falling within a compensation plan which were brought to my attention are health and safety standards. These, according to the evidence of Mr. Pageau, do not form part of the compensation package.
In any event, I do not find it necessary to delve unduly into the distinction between compensation and non-compensation items of a collective agree ment since I think neither section 7 nor section 16 can be said to preserve a right to collective bar- gaming. Those sections prescribe ways in which collective agreements can be changed: under sec tion 7 by Treasury Board; under section 16 with the approval of the Governor in Council. But to prescribe ways by which collective agreements can be changed is not synonymous with preserving a right to collective bargaining. I do not see how collective bargaining can be retained when the ability to collectively withdraw services is not retained by the employees. And, this is ruled out by the operation of section 6 of the Restraint Act and section 101 of the Public Service Staff Rela tions Act, as noted above. What the Restraint Act allows is for employees to make requests for changes and for Treasury Board to consent to such requests when they relate to non-compensation items and for the Governor in Council to consent to such requests when they relate to compensation matters. But there is no element of bargaining in this. Bargaining involves a giving and taking, it involves more than just the right to make requests. We would not say that a person was free to bargain if he were compelled to purchase an article. We would not say that a person was free to bargain if he was compelled to sell an article. Similarly, I do not think one can say that a right to collective bargaining is preserved if there is no right to collectively withdraw services.
Counsel for the defendants argued that, in any event, the Restraint Act should be considered as merely suspending bargaining rights for a two or three-year period, and not as denying or destroying them. A suspension for two or three years is merely a polite way of describing a denial during that period of time.
Freedom of association—Charter of Rights and Freedoms
Having found that the Public Sector Compen sation Restraint Act limits the right to bargain which federal public servants would otherwise have, it must be asked whether this is a right (freedom) protected by the Canadian Charter of Rights and Freedoms. The plaintiff argues that paragraph 2(d) which guarantees "freedom of association" encompasses, at least as far as trade unions are concerned, the freedom (right) to bargain.
In support of this contention counsel relies on the principle of interpretation that constitutional documents and particularly constitutional charters of rights must be given a liberal and generous interpretation. The cases cited to me were Edwards v. Attorney-General of Canada, [1930] A.C. 124 (P.C.), at page 136; British Coal Corpo ration v. The King, [1935] A.C. 500 (P.C.), at page 518; Attorney-General for Ontario and Others v. Attorney-General for Canada and Others and Attorney-General for Quebec, [1947] A.C. 127 (P.C.), at page 154; Minister of Home Affairs v. Fisher, [1980] A.C. 319 (P.C.), at pages 328 and 329; Curr v. The Queen, [ 1972] S.C.R. 889, at page 899; Attorney General of Quebec v. Blaikie et al., [1979] 2 S.C.R. 1016, at pages 1029 and 1030 and Re Skapinker (1983), 40 O.R. (2d) 481 (C.A.), at page 484, appealed to the Supreme Court of Canada [[1984] 1 S.C.R. 357].
There is no dispute concerning the proposition for which reference to these decisions was made: a constitutional document and particularly a consti tutional charter of rights and freedoms should receive
... a generous interpretation avoiding what has been called 'the austerity of tabulated legalism' ....
(Minister of Home Affairs v. Fisher supra, at p. 328)
That does not mean, however, as counsel for the defendants pointed out, that one is entitled to read into a constitutional document or charter of rights things that are not there. Refer: Attorney-General of Fiji v. Director of Public Prosecutions, [1983] 2 W.L.R. 275 (P.C.), at page 281 and The Queen v. Bowen, (unreported, November 10, 1983 (Ont. H.C.) at pages 8 and 9.)
Counsel for the defendants argued that (1) the plaintiff's argument respecting the scope of para graph 2(d) of the Charter rested on a confusion between a right and a freedom; (2) freedom of association guaranteed to employees the freedom to bargain; (3) but this freedom to bargain encom passed only freedom to associate together, to for mulate joint proposals and to present those pro posals to their employer; it did not encompass the right to strike and it did not obligate the employer to bargain in good faith.
I accept the concept, inherent in the argument counsel for the defendants made in drawing a distinction between a right and a freedom although I am not convinced that the words right and freedom are the appropriate labels to use in describing this distinction. It seems to me right and freedom are words very often used synony- mously and to try to separate them in a categorical way may only create confusion. As I understand the concept, it is that there is a difference between a right (or freedom) belonging to someone which imposes no positive burdens on others and a right (or freedom) which imposes positive burdens on others. Thus I agree that the right (or freedom) to bargain, if constitutionally guaranteed, would not go so far as to impose on the employer a duty to bargain in good faith with the employees, or even to listen to them. He might, with impunity, turn a deaf ear, just as freedom of speech does not impose on anyone the duty to listen to what is being said.
Professor Tarnopolsky, as he then was, draws the distinction in his book The Canadian Bill of Rights (2nd ed, 1975) at page 1:
It may be that an individual or a group demands non-interfer ence from the state, at least in certain activities: this is a claim for freedom or liberty. It may be, however, that the demand is for state intervention to protect one's way of life against encroachment by others, or to provide it either as a minimum living standard or on the basis of equality with others: this is a claim for the positive assistance of the state in the securing of certain rights.
See also: Allman et al. v. Commissioner of the Northwest Territories (1983), 44 A.R. 170 (N.W.T.S.C.) and Re Service Employees' Inter national Union, Local 204 and Broadway Manor Nursing Home, et al. and two other applications (infra).
In any event, I agree that a right (or freedom) to bargain, if constitutionally entrenched would not carry with it a duty on the employer to bargain in good faith or the right to have operating all the mechanisms of arbitration and conciliation as pro vided for in the Public Service Staff Relations Act.
But there is a leap in counsel for the defendants' argument from that proposition to the proposition that freedom to bargain includes only the right to associate together, to formulate common proposals and to present these proposals to the employer. The place of the freedom (right) to strike, or to withdraw services collectively, (which is perhaps a less emotional way of describing the activity) has not been dealt with. A (freedom) right to collec tively withdraw services does not place any positive burden on the employer or on the state. It is action entirely within the hands of those alleged to have that freedom (right). As noted above, it is my view that the very notion of a right to bargain must carry with it more than merely the three elements identified by counsel for the defendants.
Counsel for the defendants based his argument that freedom to strike is not part of freedom to bargain and his argument that freedom to bargain is part of freedom of association on the comments of Mr. Kaplan before the Special Joint Committee of the Senate and the House of Commons on the Constitution: Minutes of Proceedings and Evi dence of the Special Joint Committee of the Senate and of the House of Commons on the Constitution of Canada, January 22, 1981, p. 43: 69-70.
At one time records of such debates were not even admissible as relevant to the interpretation of legislation. Now that the rule has become more liberalized, we must not go too far the other way in terms of assuming that such comments should always be given significant weight. It should not be forgotten that statements made in such circum stances have an advocacy character. An attempt is being made to convince the members of the com mittee of the soundness of the Minister's proposals.
Accordingly, I am not willing, in this case, to give much weight to the Minister's interpretation of the section unless there are other indicia leading to the same conclusion. As noted above, I think the Minister's position that freedom to bargain collec tively does not include freedom to collectively withdraw services flies in the face of the ordinary meaning of the word bargain.
Finding that freedom to strike comes within the concept freedom to bargain does not, however, end the matter. One must also determine that freedom to bargain is encompassed by the concept of free dom of association.
Counsel for the plaintiffs arguments to this effect were heavily based on the as yet unreported decision, dated October 24, 1983, of the Ontario Divisional Court in Re Service Employees' Inter national Union, Local 204 and Broadway Manor Nursing Home, et al. and two other applications (1983), 44 O.R. (2d) 392. (That decision is pres ently under appeal.) [Appeal dismissed: 1086-83, judgment dated October 22, 1984, Ontario Court of Appeal, not yet reported.] One can summarize those arguments as: (1) it was the intention of the drafters that this be the case as is evident from the statements of Mr. Kaplan to the Joint Parliamen tary Committee, (2) the history of freedom of association at common law included the freedom to bargain and strike; (3) the international cove nants to which Canada has acceded protect this right and (4) freedom of association must encom pass protection for the fundamental purposes for which an association is formed or else the freedom could be rendered a hollow one. In the words of Galligan J. in the Broadway Manor case, at page 409 of his decision:
I cannot imagine that the Charter was ever intended to guaran tee the freedom of association without also guaranteeing the freedom to do that for which the association is intended. I have no hesitation in concluding that in guaranteeing workers' free dom of association the Charter also guarantees at the very least their freedom to organize, to choose their own union, to bargain and to strike.
With respect to counsel's first argument, which is supported by O'Leary J., at page 46 of his judgment in the Broadway Manor case, I have already indicated that I do not find it convincing. Just as I am not willing to accept Mr. Kaplan's
interpretation of the concept of bargaining equally I am not willing to accept his interpretation of the concept of freedom of association.
With respect to the second argument, O'Leary J. in the Broadway Manor case, at pages 47 and following of his judgment, purported to find that the history of freedom of association at common law encompassed a freedom (right) to bargain collectively and strike. He relied on Crofter Hand Woven Harris Tweed Co., Ltd. v. Veitch, [1942] 1 All E.R. 142 (H.L.), at pages 158-159, and C.P.R. v. Zambri, [1962] S.C.R. 609, at pages 619-621; 34 D.L.R. (2d) 654, at pages 656-657. But neither of these cases deal with the history of the freedom of association. Rather they deal with the history of the right to strike.
The third argument, that based on the interna tional covenants is found at pages 49-54 of O'Leary J.'s decision. I do not draw the same conclusion from a review of the international cove nants as he does. The U. N. Universal Declaration of Human Rights provides in article 20:
1. Everyone has the right to freedom of peaceful assembly and association.
and in article 23:
4. Everyone has the right to form and to join trade unions for the protection of his interests.
The U. N. International Covenant on Civil and Political Rights acceded to by Canada on May 19, 1976 provides in article 22:
1. Everyone shall have the right to freedom of association with others, including the right to form and join trade unions for the protection of his interests.
The European Convention for the Protection of Human Rights and Fundamental Freedoms pro vides in article 11:
1. Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests.
I do not find that the wording of any of these conventions carries with it a right to strike. They seem to do no more than to accord to employees
the right to join together in association, to organ ize and to advocate their common interests without reprisal. See Schmidt and Dahlstrom v. Sweden (1976), 1 E.H.R.R. 632 (Eur. Court H.R.), at page 636, where Swedish legislation denying retro- activity of benefits to employees who had engaged in a strike, while granting retroactive benefits to those who did not strike was held not to infringe Article 11 of the European Convention.
The U.N. International Covenant on Economic, Social and Cultural Rights to which Canada acceded on May 19, 1976 and the I.L.O. Conven tions do go further. The first of the above expressly provides for a right to strike:
Article 8
1. The States Parties to the present Covenant undertake to ensure:
(a) The right of everyone to form trade unions and join the trade union of his choice, subject only to the rules of the organization concerned, for the promotion and protection of his economic and social interests. No restrictions may be placed on the exercise of this right other than those prescribed by law and which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others;
(b) The right of trade unions to establish national federations or confederations and the right of the latter to form or join international trade-union organizations;
(c) The right of trade unions to function freely subject to no limitations other than those prescribed by law and which are necessary in a democratic society in the interests of national security or public order of for the protection of the rights and freedoms of others;
(d) The right to strike, provided that it is exercised in conformity with the laws of the particular country.
2. This article shall not prevent the imposition of lawful restrictions on the exercise of these rights by members of the armed forces or the police or of the administration of the State.
3. Nothing in this article shall authorize States Parties to the International Labour Organisation Convention of 1948 con cerning Freedom of Association and Protection of the Right to Organize to take legislative measures which would prejudice, or apply the law in such a manner as would prejudice, the guarantees provided for in that Convention.
Convention 87 of the International Labour Organization provides in part:
Article 2
Workers and employers, without distinction whatsoever, shall
have the right to establish and, subject to the rules of the
organisation concerned, to join organisations of their own choosing without previous authorisation.
Article 3
1. Workers' and employers' organisations shall have the right to draw up their constitutions and rules, to elect their repre sentatives in full freedom, to organise their administration and activities and to formulate their programmes.
2. The public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof.
Article 4
Workers' and employers' organisations shall not be liable to be dissolved or suspended by administrative authority.
Article 5
Workers' and employers' organisations shall have the right to establish and join federations and confederations and any such organisation, federation or confederation shall have the right to affiliate with international organisations of workers and employers.
Article 8
1. In exercising the rights provided for in this Convention workers and employers and their respective organisations, like other persons or organised collectivities, shall respect the law of the land.
2. The law of the land shall not be such as to impair, nor shall it be so applied as to impair, the guarantees provided for in this Convention.
Article 3 of this Convention, at least to the extent that it guarantees a right "to organize their
. activities", seems to have been interpreted as guaranteeing a qualified right to strike. (It should be noted, however, that the Judicial Committee of the Privy Council in the Collymore case (infra) and the Alberta Court of Queen's Bench in Re Alberta Union of Provincial Employees et al. and the Crown in right of Alberta (1980), 120 D.L.R. (3d) 590 both interpreted Convention 87 as not including any such right.)
In any event, the fact that Canada has acceded to international conventions which provide for a right to strike does not mean that the Charter of Rights which was intended to place certain rights above the ordinary laws of the land intended to incorporate all rights contained in those interna tional conventions. There are many conventions
which Canada signs, seeing them as in conformity with the ordinary law of the land, or being willing to make the ordinary law conform thereto. But it is an entirely different thing to draw from that the intention to put such rights in a sense above the ordinary laws of the land as is done in a constitu tional charter. This is especially so when the inter national convention rights in question are condi tioned expressly to be only "exercised in conformity with the laws of the particular coun try" as is the case with the U.N. International Convention 'on Economic, Social and Cultural Rights, or implicitly limited as is the case with the I.L.O. Convention. These two international con ventions go far beyond what is usually considered to be fundamental rights, or what can fairly be said to be encompassed under the rubric "funda- mental rights" in the Canadian Charter of Rights and Freedoms.
In this regard, it is important to note that a complaint was brought against the Government of Canada by the Professional Institute of the Public Service of Canada, the Canadian Labour Con gress, the plaintiff in this action and the Confed eration of Canadian Unions alleging that the Restraint Act constituted a violation of trade union rights as set out in the I.L.O. Conventions 87, 98 and 151: 'Case No. 1147, found in the 222nd Report of the Committee on Freedom of Association, International Labour Office, Geneva 1-4 March 1983. The Committee on Freedom of Association did not find that Canada contravened the conventions.
As regards the alleged violation of Article 2 of Convention No. 87, the Committee after a thorough examination of the Act, considers that the right of workers in the federal public service to establish and join organizations of their own choosing without previous authorization would not appear to be adverse ly affected.
The committee did not find that the Act infringed article 3 of Convention No. 87:
The denial of the right to strike in the present case, despite the measures taken to place certain restrictions on wage bar gaining, is nevertheless accompanied by procedures which allow not only for bargaining beyond the minimum levels fixed by the new legislation (i.e. 6 per cent and 5 per cent), but which in certain cases, allow for exceptions to be made as well as
providing for mediation in case of dispute. [On this point the Committee's interpretation of the effect of the Restraint Act is different from my own.]
Article 4 of Convention 98 was also held not to have been infringed:
As regards the allegation that Article 4 of Convention No. 98 is violated by the suspension of collective bargaining imposed by the Act, the Committee would recall the criteria established by I.L.O. supervisory bodies ... namely that stabilization measures restricting the right to collective bargaining might be acceptable on condition that they are of an exceptional nature, and only to the extent that they are necessary, without exceed ing a reasonable period, and that they are accompanied by adequate safeguards to protect workers' living standards.
Articles 7 and 8 of Convention No. 151 were held not to have been violated because:
Article 7 allows a certain flexibility in the choice of proce dures to be issued in the determination of the terms and conditions of employment ... some of the parties in the present case are continuing negotiations on certain issues ... the Com mittee is unable to conclude that public employees cannot participate in the determination of their terms and conditions of employment ... .
As regards the alleged breach of Article 8 of Convention No. 151 concerning the settlement of disputes .... This Article has been interpreted as giving a choice between negotiation or other procedures ... in settling disputes. In the present case, the temporary exclusion of third party arbitration procedures that are normally available under the Public Service Staff Relations Act would not conflict with the requirements of Article 8 ....
See also Re Alberta Union of Provincial Employees et al. and the Crown in right of Alber- ta (1980), 120 D.L.R. (3d) 590 where the Alberta Court of Queen's Bench held that provincial legis lation limiting the right to strike and limiting the matters which could be dealt with by an arbitra tion board did not violate Canada's international obligations under I.L.O. Convention No. 87 or under the International Covenant on Economic, Social and Cultural Rights.
The fourth argument found in the Broadway Manor case is perhaps the most compelling: that if the purposes for which an association is organized are not protected by the right to freedom of asso ciation there is a danger that the freedom itself can be undercut. While I would not want to be too categorical in responding to that argument, I think at least one can say that the right to bargain collectively (including therein the right to collec tively withdraw services) is not protected by the constitutional guarantee of freedom of association.
A useful starting point is the statement by Lord Wilberforce in Minister of Home Affairs v. Fisher (supra) cited by the plaintiff [at page 329]:
A constitution is a legal instrument giving rise, amongst other things, to individual rights capable of enforcement in a court of law. Respect must be paid to the language which has been used and to the traditions and usages which have given meaning to that language. [Underlining added.]
I do not find anything in the traditions and usages in Anglo-Canadian jurisprudence which would lead to the conclusion that the usage of the term "freedom of association" is meant usually to include a freedom to bargain. Indeed the decision in Collymore v. Attorney-General, [1970] A.C. 538 (P.C.), indicates quite the contrary. That deci sion relates to a provision in the Constitution of Trinidad and Tobago which declared that freedom of association was a fundamental right which no law could abrogate. The Industrial Stabilization Act, 1965, was enacted imposing a system of com pulsory arbitration by an industrial court and pro hibiting any trade union calling a strike. The Act was challenged as an unconstitutional infringe ment of a guaranteed fundamental right. It was held that the Act undoubtedly abridged the free dom to bargain collectively and the freedom to strike, but these could not be equated with the right of freedom of association.
Lord Donovan, in coming to his decision, quoted a passage from the Court below, at page 547:
"In my judgment, then, freedom of association means no more than freedom to enter into consensual arrangements to promote the common interest objects of the associating group. The objects may be any of many. They may be religious or social, political or philosophical, economic or professional, edu cational or cultural, sporting or charitable. But the freedom to associate confers neither right nor licence for a course of conduct or for the commission of acts which in the view of Parliament are inimical to the peace, order and good govern ment of the country."
Equally the jurisprudence in the United States has found that freedom of association extends only to the right to join together, to persuade others to do so, to engage in advocacy on behalf of its members. In the decision Hanover Tp. Federation of Teachers, Local 1954 (AFL-CIO) v. Hanover
Community School Corp. C.A.Ind. 457 F.2d 456 (1972) (7th Cir.), it is said at pages 460-461:
... protected "union activities" include advocacy and persua sion in organizing the union and enlarging its membership, and also in the expression of its views to employees and to the public. For that reason, the State may not broadly condemn all union activities or discharge its employees simply because they join a union or participate in its activities. It does not follow, however, that all activities of a union or its members are constitutionally protected.
Thus, the economic activities of a group of persons (whether representing labour or management) who associate together to achieve a common purpose are not protected ....
See also Smith v. Arkansas State Highway Employees, 441 U.S. 463 (1979) (8th Cir.).
Counsel for the plaintiff argued that the United States jurisprudence is of limited value because the freedom of association guaranteed under that country's Constitution is an outgrowth of the First Amendment which protects freedom of religion, speech, the press and assembly but does not expressly refer to a freedom of association. See Tribe, American Constitution Law (1978) at pages 576, 702 and 703.
While this is true, the presence of a reference in section 2 of the Charter to a freedom of associa tion may do no more than reflect the fact that it was drafted almost 200 years after the United States constitutional amendment and at a time when freedom of association had been interpreted in that country as an outgrowth of the freedom to assemble. I note that in the Canadian Bill of Rights, paragraph 1(e), freedom of assembly and association are linked as related rights.
In addition, as noted above I do not find any thing in the international law context which com pels the broad interpretation of freedom of associa tion which is contended for. I do not think it would have been intended in a section of the Charter of Rights and Freedoms dealing with fundamental rights to include a right that is essentially econom ic in nature without some more express wording indicating this to be the case.
In my view the clause "freedom of association" guarantees to trade unions the right to join to gether, to pool economic resources, to solicit other members, to choose their own internal organiza tional structures, to advocate to their employees and the public at large their views and not to suffer any prejudice or coercion by the employer or state because of such union activities. But it does not include the economic right to strike.
After writing the above my attention was called to a decision of the British Columbia Court of Appeal, dated March 5, 1984 in Dolphin Delivery Ltd. v. Retail, Wholesale and Dept. Store Union, Loc. 580, [1984] 3 W.W.R. 481. That Court came to the same conclusion as I have on the interpreta tion of the scope of "freedom of association".
Reasonable Limits ... Demonstrably Justified
It is not necessary for me to deal with the applicability of section 1 of the Canadian Charter of Rights and Freedoms because of the conclu sions I have come to above. Nevertheless, since I expect that a higher court than this will be seized of this matter shortly and because an assessment of the evidence is necessarily involved I will review the evidence and arguments which were presented on this point.
Section 1 provides that the rights and freedoms set out in the Charter are guaranteed.
1. ... subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.
Four economists were called to give evidence about the reasonableness, or lack thereof, of the government's restraint measure. Professors Ascah, Watkins, McCallum and Purvis. Whether the test of section 1 has been met, that is, whether an abridgment of a constitutional right is a "reason- able limit ... demonstrably justified ..." , is not an economic question. But economic evidence may very well be the starting point in a case such as this. The task of weighing what constitutes a "rea- sonable limit", what is a justifiable abridgment of constitutional rights under section 1 necessarily
involves an assessment of the economic benefit to society as a whole, resulting from the restraint, against the cost of the infringement to individuals.
Professor McCallum's description of the role of economic opinion in this balancing exercise is very apt:
... economists have no special expertise in deciding whether or not the overall costs of controls are greater than or less than the overall benefits. Such a judgment requires one to weigh the costs of diminished rights or freedoms against the benefits of lower unemployment.
This is an apples and oranges comparison ... not an issue that can be resolved on purely economic grounds.
Nevertheless the economist does have a role to play. The economist may be able to provide an assessment of whether the potential economic benefits of wage controls are large or small. If these benefits are large, then the ultimate decision makers will know that if they rule out controls on non-economic grounds, they will be doing so at high economic cost. On the other hand, if these potential economic benefits are very small, then controls may be ruled out for non-economic reasons at little cost in terms of economic considerations.
Three of the four economists giving evidence seemed to agree that at the time the government introduced the Restraint Act inflation was a seri ous problem about which the government should have been concerned. Professor Watkins disagreed; he argued that unemployment, not inflation was the problem. In his view, inflation at that time was coming down and, in any event, the social and economic costs of unemployment are greater than those of inflation.
In retrospect, it may have been the case that inflation was ameliorating but I accept the evi dence given that it was a reasonable economic judgment to have concluded, at the time, that inflation was a problem which needed government intervention. The evidence was that wage and price inflation had increased to double digit levels; Canada's inflation was exceeding that of the United States; and, the economy was reacting only slowly to the monetary and fiscal restraint policies which had been in effect since 1979.
I accept also the evidence that two options open to the government to deal with the inflation prob lem were (1) policies of fiscal and monetary restraint and (2) wage-price control measures. With respect to the second option, conflicting evi dence was given as to whether control measures with respect to the Canadian economy could ever be effective. This evidence related to measures of general control relating to the whole or at least the major part of the Canadian economy. Professor Ascah's opinion was that such measures could never be effective to control inflation because the Canadian economy is a small open one; a large part of its production is exported (25.4% in 1982) and a large part of its purchases are imported (25.9% in 1982): interest rates are also determined to a large extent in the international market. He pointed to the government's A.I.B. program of 1975-1978 as illustrative of the fact that control programs do not work in Canada. While the A.I.B. program restrained wages the decline in overall inflation was not so marked primarily because of exogenous food price increases and energy price increases.
Professor McCallum's evidence, on the other hand, was to the effect that "mainstream Canadi- an economists, while generally not liking controls because of a preference for free markets, have at least acknowledged that they may at times be needed or useful". Thus, Professor Lipsey, author of a brief prepared for the Canadian Labour Con gress in opposition to the Anti-Inflation Board in 1975, by 1981 had changed his view so that he was willing to advocate controls:
But if present policies do not work, I could be prepared to try controls as a part of a full policy package ... There could of course be constitutional problems and labour's hostility would be understandably strong. The late AIB's philosophy was based on the assumption that because under normal market condi tions prices tend to follow wages, the same thing could hapen under the abnormal conditions of enforced wage restraint. The AIB had some modest [success] restraining the effect on wages [sic], but that prices did not follow wages is a good example of Lucas's warning that the empirical relations of one policy regime cannot be expected to stand up under another policy regime ....
R.G. Lipsey, "The understanding and control of inflation: is there a crisis in macro-economics?" Can. J. Ec., Vol. XIV, no. 3, Aug. 1981, page 545 at page 569.
I accept Professor McCallum's evidence that
... all of the studies conclude that the A.I.B. had a substantial negative effect on wage inflations typically the estimates sug gest that the direct effect of the A.I.B. was to reduce wage settlements by some two to four percentage points in each of the three years of the program. Furthermore, the more recent studies ... also tested for a post-controls "bubble" effect. Was there an unusually high level of wage settlements or a catch-up effect immediately following the removal of controls? All of the three studies just mentioned conclude that there was no such effect.
.... There is a strong consensus among Canadian economists that the A.I.B. had a substantial negative effect on wage inflation.
Professor McCallum agreed with Professor Ascah that the overall effect on inflation generally had been disappointing because of rises in food prices and energy prices during the years in ques tion. But both agreed that without the A.I.B. program the overall rate of inflation during those years would have been higher.
The evidence was clear, however that monetary policy and not wage-price controls is the primary tool by which to combat inflation. Wage-price controls, at most, are supplementary measures. I quote again from Professor McCallum's evidence:
... controls are not a substitute for "monetary restraint" if by that term we mean a declining rate of growth of the money supply. Ultimately money growth must come down with infla tion, but the object of controls is to force inflation down at a faster rate than could otherwise occur, thereby avoiding or moderating the recession that would otherwise be required .... Thus controls may be seen as a substitute for the recessive and high unemployment that could otherwise occur as the unwanted by-product of a policy of monetary restraint.
Professor Lipsey, in his article cited above expressed the same view, at page 570
... wage-price controls can ... be used in an attempt to cut through the inflationary inertias and accomplish what the Keynesian view says the free market cannot easily do—get wage inflation down rapidly in line with the much lower inflation rate, which is all that is being validated by monetary and fiscal policy. (We have no experience to tell us how these
controls might work as part of a total package, although we have ample experience to tell us that on their own they have no lasting effect on the price level.)
Let me be clear ... incomes policies are useless (as well as costly) on their own. The package must include higher mone tary and fiscal restraint to ensure that the expansion of aggre gate money demand will be consistent with the much lower rate of inflation temporarily brought about by the controls.
And Professor Purvis:
There is one, and only one way to effect a lasting reduction in an economy's underlying inflation rate: to slow the rate of growth of nominal demand in the economy by slowing the rate of expansion of the money supply ... monetary restrictions.
And of wage-price controls, if it is chosen to use them, he said:
... such policies must be used in conjunction with monetary restriction, or they will be doomed to failure
Furthermore, the role of wage-price controls is one of:
... reducing the costs associated with monetary restriction; that is, in terms of reducing the amount and duration of unemploy ment that is incurred during the disinflation.
Thus it seems reasonable to conclude that a general wage and/or price controls program can be a reasonable economic policy as an adjunct to or supplementary measure to, an overall monetary restraint program. That leaves the question of whether the government's selective program, appli cable only to public servants was a reasonable economic measure.
In many instances one indicia of the economic reasonableness of such a program would be the actual effect it had. Thus if it could be shown that the program actually or even probably lessened unemployment this could be a significant factor respecting economic reasonableness. In this case, however, no such evidence is available. The evi dence clearly indicates that the decline in inflation which actually occurred was due to the world recession and not the government's 6 and 5 program.
The economists called by the defendants testi fied as follows:
Professor McCallum:
There is no reliable or `scientific' way of saying how much of the fall in inflation has been due to the recession and how much to 6 and 5.
... it is possible that the program has had a favourable psychological effect in terms of lowering people's expectations. ... all that can be said is that 6 and 5 might have had some effect.
Professor Purvis:
... the policy may have aided in bringing inflation down at a more rapid rate and at a lower cost in terms of unemployment.
These are the strongest statements found in the economic evidence about the actual effect of the government's program. Of course, the evidence of Professors Watkins and Ascah is very strongly worded the other way. Indeed Professor Watkins is of the view that the program made the economic situation worse because it deepened the recession. In the light of all the evidence given, it seems reasonable to conclude that the government's 6 and 5 program played little part in the reduction of inflation which actually occured.
That having been said, however, it does not mean that the program could not have been a reasonable economic judgment at the time it was made. Reasonableness does not demand clairvoy ance and ability to foresee exactly what will in fact happen. It is the time at which the judgment was made that is relevant.
Professors McCallum and Purvis contend that at the time the 6 and 5 program was implemented it could have been characterized as a reasonable economic measure. Professor Purvis' evidence is as follows:
In the spring of 1982 when the government was formulating its 6 and 5 program the state of the economy was such that there was a reasonable expectation that controls could play a con structive role in helping the economy achieve a lower inflation rate.
... the 6 and 5 program appears as a reasonable program to have instituted. By directly controlling some wages in the economy (i.e., wages in the federal public sector, widely inter preted) and mounting a substantial campaign to enlist the voluntary cooperation of the private sector, the program clearly was potentially a constructive addition to the policy of severe
monetary restrictions and may have aided in bringing inflation down at a more rapid rate and at a lower cost in terms of unemployment.
Professor McCallum:
I think, however, that it is fair to say at the time of the introduction of 6 and 5 there were reasonable grounds for the belief that the program would assist in reducing inflation.
Professor Watkins and Ascah take the opposite view. They point out that only 5% of the work force was covered by the Restraint Act. They point out that even as part of an overall push to encour age voluntary wage restraint the Restraint Act could not have been expected to work to reduce inflation because voluntary programs do not work.
The conclusion that voluntary programs do not work, at least in the context of the Canadian economy and its decentralized labour relations system, was a conclusion shared by at least Profes sors Ascah, Watkins and McCallum. Professor Ascah called attention to the fact that in 1982 Professor McCallum in writing jointly with a col league had said:
It should be clear that we are not proposing a program limited to public-sector wage controls of the kind instituted in British Columbia in 1982.... Public-sector wage controls are not in themselves sufficient to have much effect on inflation, and also it seems undersirable to single out civil servants for wage controls, particularly when the public sector lagged (very slightly) behind the private sector in terms of wage settlements in 1981 and early 1982....
Barber and McCallum. "Controlling Inflation." The Canadian Institute for Economic Policy, 1982, at page 100.
Professor McCallum's response was to explain that in writing that publication he had been writ ing as an advocate while in giving evidence in this case he was trying to take a more objective approach.
Professors Ascah and Watkins contend that the Restraint Act was a charade designed to give the appearance of doing something without any reasonable expectation that it could in fact do so. Professors McCallum and Purvis argue that the Restraint Act might have had some psychological effect and could reasonably have been expected to have some psychological effect as an aid to bring ing down inflation; a psychological effect of break-
ing down inertias and expectations. Professor Ascah's view was that by its very limited nature (applicable only to 5% of the labour force) it could not have reasonably been expected to have had this psychological dampening effect because it would not be seen as demonstrating any serious resolve on the part of the government to control wages generally. Professor Ascah characterized the pro gram as a political decision with no economic rationale. Professor Watkins was of the view that it was designed for a completely ulterior motive: to weaken the public service unions.
It is clear from all this evidence and from the statements made by the ministers in the House of Commons that at the most the government's inten tion in introducing the Restraint Act was to imple ment a measure designed for its indirect effect and not as a direct economic measure to bring down inflation. The Deputy Prime Minister and Minis ter of Finance said:
The private sector and the provinces could not be expected to accept income restraint unless the Government of Canada showed leadership in the conduct of its own affairs. The government has therefore decided to lead the way by imple menting the proposed strategy in the federal public sector for a period of two years ....
I would like to emphasize that in the government's view federal public sector employees are no more responsible for inflation than any other group in the society. They too have been trying to catch up with rising prices, but their incomes have risen no more, and often rather less, than those of employees in other sectors ... If other sectors follow our leadership, federal employees will fare as well as others .... (Underlining added.)
House of Commons Debates, June 28, 1982, at page 18878.
The Minister's statements that federal employees could not be said to have contributed to inflation any more than any other group and that their wage raises in recent years had lagged behind the private sector generally were borne out by the evidence given by Professors Ascah and McCal- lum. One factor the Minister did not note, but which came out in evidence is that federal employees do have greater job security than pri vate sector employees. Professor McCallum testi fied that the average level of employment was 3 percent lower in 1982 than in 1981 for the econo my as a whole, the level of employment in the
general government sector rose by .9 percent be tween 1981 and 1982.
The President of the Treasury Board, in speak ing to the legislation said:
All realized that it was imperative for the federal government to accentuate the anti-inflationary impact of its economic policies by taking a more determined stand on wage rates. The federal public service compensation restraint program alone cannot resolve all the economic problems Canadians are wres tling with today. It should be seen as a serious and striking example that all Canadians, employers and employees, individually and collectively, must follow if they are the least bit concerned with maintaining their competitive position abroad and their standard of living at home. (Underlining added.)
House of Commons Debates, July 9, 1982, at page 19182.
The Restraint Act was thus designed to have a demonstrative effect, not to serve as a direct eco nomic lever to combat inflation. At most, it seems to have been designed to create some psychological effects, some dampening of expectations.
Having dealt with the economic justification for the Restraint Act, it is now necessary to consider the legal question. It is now necessary to ask whether a measure such as this could be said to meet the test required by section 1 of the Canadi- an Charter of Rights and Freedoms. I think it could not. If freedom to bargain collectively was a constitutionally guaranteed right I would hold that the Restraint Act was not a "reasonable limit ... demonstrably justified" in the sense of section 1.
In argument counsel for the defendants seemed to define the test required by section 1 as requiring a legislative measure enacted by Parliament which had some reasonable rationale. This seems to have been the test applied by the Ontario Divisional Court in the Broadway Manor case (supra). I think a stronger test than that is required, at least, when one is dealing with limitations on fundamen tal freedoms set out in section 2. One must not forget that there is always section 33 which allows Parliament to expressly override the rights guaran teed by section 2. If section 1 requires no more than some reasonable legislative rationale there would be no scope left for section 33 unless one assumes that Parliament would deliberately decide to legislate without a reasonable rationale.
It may very well be that the test to be met in order to meet the requirements of section 1 will vary depending upon the type of rights to which a limitation is being made. But, I think the test required to justify an abrogation of a fundamental right is a very substantial one. I do not think in this case that the benefit accruing to society as a whole as a result of the government's Restraint Act is sufficiently substantial to justify an abridg ment of constitutionally guaranteed individual rights. In this regard I would note that more than a "reasonable limit" is required. The words "demonstrably justified" require more than merely some reasonable rationale. And they require more than to show that it was Parliament's judgment that the limitation was justified—this is provided for by meeting the test "prescribed by law" set out in section 1. The limitation in this case being designed for its demonstration effect, and to play, at best, an indirect part in the attaining of the objective sought (the reduction of inflation) does not meet the requirements of section 1.
One last point respecting the evidence tendered must be dealt with. Written evidence prepared by Professor Ascah was tendered as rebuttal evidence. This was objected to by counsel for the defendants on the ground that the plaintiff was splitting his case. I reserved judgment. Having now had an opportunity to read carefully the text prepared by Professor Ascah in the light of the expert evidence that had been given by the defendants' witnesses, I find that enough of it is properly admissible as rebuttal evidence to allow the whole text to go in. The rest tends to be duplication and unnecessary but it is not so clearly an instance of the plaintiff splitting his case as to be inadmissible.
Fundamental Justice—Charter of Rights
The plaintiff's second main argument is that the Restraint Act is invalid as an infringement of section 7 of the Canadian Charter of Rights and Freedoms.
7. Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
The argument is based on the contention that "liberty" in section 7 includes the freedom to enter into contracts particularly contracts relating to the terms of employment. It is argued that (1) the Charter as a constitutional document should be given a liberal and generous interpretation; (2) the ordinary dictionary definition of the word liberty extends beyond mere physical liberty and is broad enough to encompass the right claimed; (3) liberty in section 7 must include more than physical liber ty because physical liberty is adequately protected by other sections of the Charter, for instance, sections 8, 9, 10 and 12. If this argument is accepted it would also be necessary to show a denial of the principles of "fundamental justice" in order to demonstrate a breach of section 7. Coun sel for the plaintiff argues that "fundamental jus tice" in section 7 means more than "natural jus tice" or "procedural fairness"; that it has a substantive content. He relies for this proposition on the decision of the British Columbia Court of Appeal in Reference re Section 94(2) of the Motor Vehicle Act (1983), 147 D.L.R. (3d) 539 [at pages 541-542]:
The contention of the Attorney-General was that the phrase "the principles of fundamental justice" should be equated with the principles of natural justice and reference was made to de Smith's Judicial Review of Administrative Action, 4th ed. (1980) ... at p. 156:
Upon this view of the matter the effect of s. 7 is to enshrine in the Constitution the principles of natural justice. That is certainly one view of the matter. It does not, however, give any effect to s. 52 of the Constitution Act, 1982 which can be viewed as effecting a fundamental change in the role of the courts. The Bill of Rights allowed the courts to test the content of federal legislation, but because the Bill was merely a statute, its effectiveness was hampered by the equally persuasive "pre- sumption of validity" of federal legislation. The Constitution Act, 1982 in our opinion, has added a new dimension to the role of the courts; the courts have been given constitutional jurisdic tion to look at not only the vires of the legislation and whether the procedural safeguards required by natural justice are present but to go further and consider the content of the legislation.
The court therefore held subsection 94(2) of the British Columbia Motor Vehicle Act [R.S.B.C. 1979, c. 288, as am. by S.B.C. 1982, c. 36, s. 19] ultra vires. That subsection provided that driving while prohibited from doing so or while one's
licence was suspended was an absolute liability offence in which guilt was established by proof of driving whether or not the defendant knew of the prohibition or suspension. See also R. v. Stevens (1983), 145 D.L.R. (3d) 563 where the Ontario Court of Appeal assumed [at page 565] "without in any way deciding" that s. 7 of the Charter allowed for judicial review of the substantive con tent of legislation.
It was argued that the Restraint Act was con trary to the principles of fundamental justice in the substantive sense because of its discriminatory nature. That is, it limited the rights of 5% of the population, whose wage raises had been trailing in recent years, and when the likelihood of the restraint measure being able to accomplish or con tribute to a diminution of inflation was marginal at best.
Counsel recognized that his argument that sec tion 7 encompasses substantive due process was not an easy one to make. Firstly, the phrase "prin- ciples of fundamental justice" would appear to come from paragraph 2(e) of the Canadian Bill of Rights. Those words were interpreted by the Supreme Court of Canada in Duke v. The Queen, [1972] S.C.R. 917, at page 923, as essentially equivalent to procedural due process. Secondly, evidence given before the Joint Parliamentary Committee on the Constitution was to the effect that, at least in the view of the officials of the Department of Justice, the words "fundamental justice" cover only the same grounds as "procedu- ral due process", "natural justice" or "procedural fairness". See: Proceedings of the Senate and House of Commons Committee on the Constitu tion, January 27, 1981 at pages 46:32 and follow ing. Counsel for the plaintiff thought that this view was qualified somewhat by the opinion expressed at page 46:33:
There is a possibility that in a particular context one could see it [fundamental justice] as having a somewhat expanded meaning.
That quotation, however, goes on to say:
... but there is no jurisprudence which would indicate that it is clearly broader than the principles of fundamental justice that have been articulated in all of the various common law decisions.
In addition, there are two cases which have taken a different view from that of the British Columbia Court of Appeal in the Motor Vehicle Act Reference case noted above. In R. v. Hayden, [1983] 6 W.W.R. 655, the Manitoba Court of Appeal held that section 7 of the Charter relates only to procedural fairness; the Ontario Supreme Court was of the same view in Re Mason; Mason v. R. in Right of Can. (1983), 35 C.R. (3d) 393. I would also note that the British Columbia Court of Appeal in the Motor Vehicle Act Reference case when referring to de Smith's comments on natural justice quoted only from page 156 of that text. The author goes on at page 157 to say that the follow ing phrases found in the jurisprudence are synony mous with natural justice: " `substantial justice', 'the essense of justice', `fundamental justice', 'uni- versal justice', `rational justice' ...". (Underlining added.) Reference should also be made to Hogg, Canada Act 1982 Annotated, (1982) at page 28 and Tarnopolsky and Beaudoin, The Canadian Charter of Rights and Freedoms (1982) at page 18. The view expressed in those texts is that section 7 relates to procedural fairness.
The better view does seem to be that section 7 relates only to procedural fairness but in any event I think counsel's argument founders with its first step. That is, I do not think the term "liberty" in section 7 encompasses freedom of contract.
I come to this conclusion for much the same reasons that I reject the argument that freedom of association encompasses freedom to bargain. The words "life, liberty and security of person" are not without some tradition and background. I have not been cited any authority for the proposition that that tradition has included freedom to contract as within the meaning of "liberty".
In addition, the term takes some colouration from the context within which it exists in the
Charter. Section 7 seems to be framed as an introductory umbrella, as counsel for the defend ants put it, to the seven sections which follow. These, including section 7, fall under the rubric "legal rights". Freedom to contract is an economic right.
See also Tarnopolsky and Beaudoin, The Canadian Charter of Rights and Freedoms (1982), at page 270:
We believe that the term "liberty", utilised in s. 7, must be understood in a restrictive sense. Section 7 is concerned with physical liberty of the person, the right to dispose of one's own body, of one's person; in this context the right to liberty cannot signify "the right to a free exercise of human activity", contrac tual freedom, freedom of choice of mode of life, professional freedom, etc. Those infringements on liberty which are designed to restrict the free disposition of one's body or of one's physical person, including the interdiction on suicide, are out side the infringements on liberty enumerated at ss. 8-10. Included in these sections are those infringments on liberty contained in measures imposing medical or prophylactic treatment.
The Enjoyment of Property—Due Process— Canadian Bill of Rights
Section 1 of the Canadian Bill of Rights, S.C. 1960, c. 44, provides:
1. It is hereby recognized and declared that in Canada there have existed and shall continue to exist ...
(a) the right of the individual to life, liberty, security of the person and enjoyment of property, and the right not to be deprived thereof except by due process of law; (Underlining added.)
Counsel for the plaintiff argues that persons covered by collective agreements in which prospec tive wage rises were "rolled back" by the Restraint Act (for example the CR, ED and EU groups) were deprived of property without due process of law. He argues that a right to a wage rise at a future date under an existing collective agreement is a property right vested and enforceable. It is argued that this is not substantially different from the type of property interest a remainderman holds during the tenancy of a life tenant.
I am not convinced that this is so. A remainder- man has nothing to perform. He must only contin ue to exist in order to obtain the remaindered estate. An employee under a collective agreement
must, however, provide the services he has con tracted to provide before he is entitled to the wages.
In any event, "without due process of law" in the Canadian Bill of Rights has not been inter preted as including substantive due process. Even if the Supreme Court left the door open a crack, towards this expanded interpretation in Curr v. The Queen, [1972] S.C.R. 889, at pages 899-900, as plaintiff argues, jurisprudence since that time has not opened that door. Indeed, Chief Justice Laskin in giving the majority decision of the Court in the Curr case at page 902, warned against entering the "bog or legislative policy making" which is involved in considerations of economic due process. Professor Tarnopolsky, as he then was, in his book The Canadian Bill of Rights (2nd ed., 1975), at pages 234-235, summarizes the jurisprudence which exists on this point:
Quite clearly, in view of the cases discussed in this part, it would appear that the due process clause will not be applied so as to protect property rights affected by federal expropriation and nationalization laws, or confiscation provisions in federal statutes arising out of proscribed activities ... the expropria tion power is based upon economic policy decisions which should be the sole prerogative of the legislative body ....
I accept this as an accurate statement of the law respecting the interpretation of the "due process" clause in the Canadian Bill of Rights. If, however, the procedures by which such property was expro priated were unfair or questionable then the due process clause might be invoked.
Equality Before the Law—Canadian Bill of Rights
Paragraph 1(b) of the Canadian Bill of Rights provides:
1. It is hereby recognized and declared that in Canada there have existed and shall continue to exist ...
(b) the right of the individual to equality before the law ...
It is argued that the Restraint Act infringes this right because it singles out federal public servants for restrictive treatment without rational grounds. The argument is that the legislation is capricious and arbitrary because it singles out 5% of the work force, who were admittedly no more responsible for inflation than any other group and whose wage rises in recent years had lagged behind the private sector. It is argued, as noted above, that the pur pose of the legislation was to create an illusion that the government was doing something to combat inflation.
It is admitted that this branch of the plaintiff's argument depends upon the interpretation of and application of the Supreme Court decisions in The Queen v. Drybones, [1970] S.C.R. 282; Attorney General of Canada v. Lavell, [1974] S.C.R. 1349; R. v. Burnshine, [1975] 1 S.C.R. 693; Prata v. Minister of Manpower and Immigration, [1976] 1 S.C.R. 376 and MacKay v. The Queen, [1980] 2 S.C.R. 370.
These cases are not easy to apply. I take as the starting point the decision of Mr. Justice Ritchie in Attorney General of Canada v. Lavell at page 1365:
... having regard to the language employed in the second paragraph of the preamble to the Bill of Rights, the phrase "equality before the law" as used in s. 1 is to be read in its context as a part of "the rule of law" to which overriding authority is accorded by the terms of that paragraph.
In this connection I refer to Stephens Commentaries on the Laws of England, 21st Ed. 1950, where it is said in Vol. III at p. 337:
Now the great constitutional lawyer Dicey writing in 1885 was so deeply impressed by the absence of arbitrary govern ments present and past, that he coined the phrase 'the rule of law' to express the regime under which Englishmen lived; and he tried to give precision to it in the following words which have exercised a profound influence on all subsequent thought and conduct.
'That the "rule of law" which forms a fundamental princi ple of the constitution has three meanings or may be regarded from three different points of view .... '
The second meaning proposed by Dicey is the one with which we are here concerned and it was stated in the following terms:
It means again equality before the law or the equal subjec tion of all classes to the ordinary law of the land adminis tered by the ordinary courts; the 'rule of law' in this sense excludes the idea of any exemption of officials or others from the duty of obedience to the law which governs other citizens
or from the jurisdiction of the ordinary courts. [Underlining added.]
There is an additional aspect, however, to the concept "equality before the law" as appears from the decision of Mr. Justice Ritchie speaking for the Court in The Queen v. Drybones (supra) and the decision of Mr. Justice Martland speaking for the Court in R. v. Burnshine, [1975] 1 S.C.R. 693. This second aspect is elaborated by Mr. Justice Martland at pages 707-708 of the Burnshine case.
In my opinion, it is not the function of this Court, under the Bill of Rights, to prevent the operation of a federal enactment, designed for this purpose, on the ground that it applies only to one class of persons, or to a particular area.
The words used by Laskin J. in a slightly different context, in Curr v. The Queen, supra, at p. 899, may have application here. He was considering the extent to which this Court might, under s. 1(a) of the Bill of Rights, the "due process of law" provision, have power to control substantive federal legislation. He said, on the assumption that such power might exist,
... compelling reasons ought to be advanced to justify the Court in this case to employ a statutory (as contrasted with a constitutional) jurisdiction to deny operative effect to a substantive measure duly enacted by a Parliament constitu tionally competent to do so, and exercising its powers in accordance with the tenets of responsible government, which underlie the discharge of legislative authority under the British North America Act.
In my opinion, in order to succeed in the present case, it would be necessary for the respondent, at least, to satisfy this Court that, in enacting s. 150, Parliament was not seeking to achieve a valid federal objective. This was not established or sought to be established.
The test of a valid federal objective was one which was employed by the Supreme Court in both the Hal case (supra) and the MacKay case (supra). Counsel for the defendants seemed to argue that meeting this test required no more than the Diceyan concept of "equality before the law" as it has been described above by Mr. Justice Ritchie in the Lavell case, or no more than the general constitutional tests required by sections 91 and 92 of the Constitution Act, 1867 (30 & 31 Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II, No. 5], as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1). Whatever that test requires, it certainly is not equivalent to those two concepts. As noted above, the jurisprudence, the decision of the
Supreme Court in the Drybones case (supra) and particularly the decision of Mr. Justice Martland in the Burnshine case, indicates that it is an addi tional branch and not equivalent to the Diceyan requirements of "equality before the law". If it were to mean no more than valid in accordance with sections 91 and 92 of the Constitution Act, 1867 then the Supreme Court would be saying that this section of the Bill of Rights was designed to play the same role as the Constitution Act, 1867. Obviously, it could not have been intended that it would only play such a duplicative role.
Some guidance as to what is meant by the jurisprudence in this context by the phrase "valid federal objective" may be gleaned from the judg ment of Mr. Justice Martland in the Burnshine case (supra) at page 707. In that context he seems to be saying that while separate treatment for a group of persons, either on the basis of age or physical location, will not offend paragraph 1(b) of the Canadian Bill of Rights, such separate treat ment might do so if there were "compelling rea sons" to convince a Court that the separate treat ment was harsher than that accorded generally under the law and that such treatment was not validly justified (i.e. did not constitute a valid federal objective). The origin of this test can be seen in the decision of Mr. Justice Ritchie in the Drybones case (supra) at page 297. It flows also from the Court's decision in Burnshine where it was held that the legislation in question, although it treated individuals under the age of 22 different ly, was designed to seek to reform and benefit those individuals. It is a conclusion which equally seems to follow from the majority decision in MacKay (supra). In that case different treatment respecting military personnel under military law and before military tribunals was in issue. Mr. Justice Ritchie at page 398 said:
The necessity of recognizing that a separate code of law administered within the services is an essential ingredient of service life has been appreciated since the earliest days....
and then at page 400:
It will therefore be seen, as I have said, that the National Defence Act is dealing with a particular class of individuals and, as it is enacted for the purpose of achieving a valid federal objective, the provisions of s. 1(b) of the Bill of Rights do not require that its provisions contain the same requirements as all other federal legislation.
In my view, Mr. Justice McIntyre, at page 407, is saying essentially the same thing in different words, albeit in applying a stricter test.
I would be of the opinion, however, that as a minimum it would be necessary to inquire whether any inequality has been created for a valid federal constitutional objective, whether it has been created rationally in the sense that it is not arbitrary or capricious and not based upon any ulterior motive or motives offensive to the provisions of the Canadian Bill of Rights, and whether it is a necessary departure from the general principle of universal application of the law for the attainment of some necessary and desirable social objective. Inequalities created for such purposes may well be acceptable under the Canadian Bill of Rights.
Is the Restraint Act then enacted for a valid federal objective as that term has been used in the jurisprudence? Counsel argues that it is particular ly capricious because it is the employer who is limiting the rights of the public servants to wage rises, including those already agreed upon. In my view, however, it is particularly this feature which renders the legislation valid. I could accept that restraint legislation which limited wage rises by 'all blue-eyed people' or 'all nurses' or any other group of society arbitrarily selected and whose wages were not shown to be a particularly signifi cant cause of inflation would not meet the test of a valid federal objective. However, in the instant case the government is really legislating as employer. It is not appreciably different from an employer who says to his employees that despite negotiated contracts the economic situation is such that all must take wage reductions or the company will fold. The government, of course, is not likely to go bankrupt. It is this that places public ser vants in a greater position of security than the work force as a whole, and indeed may place public service unions in a stronger bargaining posi tion. In any event, while it is not free from doubt, I would hold that employer-employee relationship between the government and those challenging the Restraint Act in this case is such as to constitute a sufficient nexus or justification to meet the test of a valid federal objective in the sense that that phrase has been used in the jurisprudence.
Accordingly, for the reasons given, the action is dismissed.
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