Landmark Supreme Court of Canada Decision Protects Collective Bargaining Under the Charter

Freedom of Association Protects Collective Bargaining and Requires Employers to Bargain in Good Faith

By Fay Faraday

On Friday 8 June 2007, the Supreme Court of Canada released a landmark decision on freedom of association ruling for the first time that collective bargaining is protected under s.2(d) of the Canadian Charter of Rights and Freedoms. The Court’s decision expressly overturns its 1987 freedom of association trilogy and extends Charter protection beyond the right to unionize that was recognized in its 2001 decision in Dunmore.

The decision in Health Services and Support-Facilities Subsector Bargaining Association v. British Columbia, 2007 SCC 27, marks a significant victory for the labour movement and establishes a new platform for analysing the right to freedom of association under the Charter. The decision will have significant implications for protecting collective action by union members. While the decision deals specifically with laws that affect collective bargaining and actions by the government as employer the decision is significant for workers in both the public and private sectors.

This appeal arose out of a challenge by a coalition of British Columbia health sector unions to provincial legislation (Bill 29) which voided health sector collective agreement provisions that prohibited contracting out and that provided protections for layoff and bumping. Bill 29 also prohibited future collective bargaining in respect of those issues. The unions argued that Bill 29 violated both the freedom of association under s. 2(d) of the Charter and the right to equality under s. 15 of the Charter.

The Supreme Court in a 6-1 majority decision written jointly by Chief Justice McLachlin and Justice LeBel ruled that the right to bargain collectively is protected as an exercise of freedom of association under s. 2(d) of the Charter. The Court ruled that collective bargaining is consistent with and supports the values of the Charter: “Recognizing that workers have the right to bargain collectively as part of their freedom to associate reaffirms the values of dignity, personal autonomy, equality and democracy that are inherent in the Charter.” Significantly for unions, the Court held that recognizing that collective bargaining is protected under s. 2(d) of the Charter imposes corresponding duties on employers to bargain in good faith. The Court ruled that the duty to bargain in good faith – including the obligation to meet, to commit time to the process, and to engage in meaningful dialogue that is aimed at arriving at an acceptable agreement – “lies at the heart of collective bargaining”. This process of collective bargaining must be a “meaningful process of consultation and discussion” and “cannot be reduced to a mere right to make representations”.

The majority of the Court concluded that the provisions in Bill 29 dealing with contracting out, layoffs and bumping violated the right to freedom of association and that these violations were not justifiable under s. 1 of the Charter because they did not minimally impair Charter rights. The majority found that the legislation did not violate s. 15 equality rights. The Court suspended its declaration of invalidity for 12 months to allow the government to address the repercussions of the decision.

Justice Deschamps, in a partial dissent, agreed with the majority’s analysis finding that the right to bargain collectively is protected under s. 2(d) but would have applied a different test for finding a breach of s. 2(d) and would have found, with one exception, that the infringements of s. 2(d) were saved under s. 1.

Our analysis below reviews the key findings of the Court. It addresses:

(a) the old framework for analysing freedom of association;
(b) the new basis for finding that collective bargaining is protected under s. 2(d);
(c) the scope of collective bargaining that is protected under s. 2(d);
(d) the test for determining when s. 2(d) is breached;
(e) the application to Bill 29; and
(f) the equality rights argument.

A. Background: The Old Framework for Analysing Freedom of Association

Since the Supreme Court issued its 1987 Trilogy on freedom of association, the Court has taken the position that freedom of association protects four elements of association. It protects (1) the freedom to establish, belong to and maintain an association; (2) it does not protect activity even if it is essential to the association; (3) it protects the exercise in association of constitutional rights and freedoms; and (4) it protects the exercise in association of rights that can be lawfully exercised by individuals 1. The Court had consistently ruled that the right to bargain collectively and the right to strike were not protected under freedom of association.

In 2001, in the case of Dunmore v. Ontario (Attorney General) 2 the Supreme Court opened the door to granting broader protection to workers under s. 2(d) by recognizing that rights that are inherently collective in nature must also be protected as an exercise of freedom of association. The Court in that case recognized that the right to unionize was protected under s. 2(d) but did not go further to examine whether any aspect of collective bargaining was protected.

With its new Bill 29 decision, the Supreme Court has squarely ruled that collective bargaining is protected and has expressly overturned twenty years of jurisprudence which had rejected protection for this fundamental labour right. The Court’s decision does not specifically address the issue of the right to strike.

B. The New Basis for Protecting Collective Bargaining Under s. 2(d)

The Supreme Court ruled that s. 2(d) protection for freedom of association rests on four principles:

1. The reasons evoked by the Supreme Court in the past for excluding collective bargaining from the protection of s. 2(d) “do not withstand principled scrutiny and must be rejected” [para. 22]. The Supreme Court’s earlier analysis had not been conducted contextually with appropriate analysis of the nature of collective bargaining. It had focussed too narrowly on the question of individual activities and the objects sought to be achieved through bargaining. It failed to give appropriate recognition to the fundamental importance of collective bargaining and had taken an overly broad view of judicial deference by effectively declaring “a judicial ‘no go’ zone for an entire right” on the ground that it may involve the courts in reviewing decisions reflecting legislative policy [para. 22-30]. Instead, the Court confirmed that legislative policy must conform to the Charter. The Court’s rejection of the arguments previously used to exclude collective bargaining from protection under the Charter lead to a reassessment of whether it was properly protected under s. 2(d).
2. Excluding collective bargaining from s. 2(d) protection is inconsistent with Canada’s historic recognition of the importance of collective bargaining to freedom of association. While the majority of the Court had previously held that the rights to strike and bargain collectively are “modern rights” created by legislation, this belies the fact that “the fundamental importance of collective bargaining to labour relations was the very reason for its incorporation into statute.” [para. 25] The Court recognizes that “association for purposes of collective bargaining has long been recognized as a fundamental Canadian right which predated the Charter” [para. 40, 41]. After reviewing the evolution of labour rights in Canada from the 1700s, the Court concluded that “the protection enshrined in s. 2(d) of the Charter may properly be seen as the culmination of a historical movement towards the recognition of a procedural right to collective bargaining.” [para. 68]
3. International conventions to which Canada is a party recognize the right of the members of unions to engage in collective bargaining, as part of the protection for freedom of association. In reaching this conclusion, the Court examined the international instruments which Canada has ratified 3 and the ILO’s interpretation of those instruments. The Court concluded that, as stated by Dickson C.J.C. in 1987, s. 2(d) of the Charter should be interpreted as granting at least the same level of protection as is granted under international human rights instruments that Canada has ratified. [para. 70, 79]
4. Charter values support protecting a process of collective bargaining under s. 2(d) of the Charter. The Court ruled that

“the protection of collective bargaining under s. 2(d) of the Charter is consistent with and supportive of the values underlying the Charter and the purposes of the Charter as a whole. Recognizing that workers have the right to bargain collectively as part of their freedom to associate reaffirms the values of dignity, personal autonomy, equality and democracy that are inherent in the Charter” [para. 86]

C. What Scope of Protection is Granted to Collective Bargaining under Section 2(d)?

In granting protection to collective bargaining, the Court has made clear that s. 2(d) protects the process of collective bargaining but does not guarantee any particular outcomes that may be sought through bargaining. Moreover, in protecting the right to collective bargaining, the Charter protects the right to “a general process of collective bargaining, not to a particular model of labour relations, nor to a specific bargaining method.” [para. 91].

Section 2(d) protection applies both in respect of legislation that is passed by government and state action where the government is an employer. With respect to legislation, the Court confirmed that “legislation must conform to s. 2(d) of the Charter and is void under s. 52 of the Constitution Act, 1982 if it does not (in the absence of justification under s. 1 of the Charter)” [para. 88].

The Court has defined the scope of the protected bargaining process broadly to take into account the history of collective bargaining in Canada and Canada’s international human rights obligations. It also confirms that the protection of collective bargaining under the Charter imposes corresponding obligations on employers to bargain in good faith:

... s. 2(d) should be understood as protecting the right of employees to associate for the purpose of advancing workplace goals through a process of collective bargaining. ...

...

... The scope of the right properly reflects the history of collective bargaining and the international covenants entered into by Canada. Based on the principles developed in Dunmore and in this historical and international perspective, the constitutional right to collective bargaining concerns the protection of the ability of workers to engage in associational activities, and their capacity to act in common to reach shared goals related to workplace issues and terms of employment. In brief, the protected activity might be described as employees banding together to achieve objectives sought through this associational activity. However, it guarantees the process through which those goals are pursued. It means that employees have the right to unite, to present demands to health sector employers collectively and to engage in discussions in an attempt to achieve workplace-related goals. Section 2(d) imposes corresponding duties on government employers to agree to meet and discuss with them. It also puts constraints on the exercise of legislative powers in respect of the right to collective bargaining... [para. 87-89]

D. The Test to Find that the Right to Bargain Collectively is Breached

The Court notes that s. 2(d) does not protect all aspects of collective bargaining. Rather, it protects only against “substantial interference” with associational activity. The Court asks: “does the state action target or affect the associational activity, ‘thereby discouraging the collective pursuit of common goals’?”

To establish a breach of s. 2(d), it is not necessary to show that there was an intent to interfere with collective bargaining. Instead, “it is enough if the effect of the state law or action is to substantially interfere with the activity of collective bargaining, thereby discouraging the collective pursuit of common goals.”

The Court ruled that

“It follows that the state must not substantially interfere with the ability of a union to exert meaningful influence over working conditions through a process of collective bargaining conducted in accordance with the duty to bargain in good faith. Thus the employees’ right to collective bargaining imposes corresponding duties on the employer. It requires both employer and employees to meet and to bargain in good faith, in the pursuit of a common goal of peaceful and productive accommodation.” [para. 90]

The Court stressed that “the right to bargain collectively protects not just the act of making representations, but also the right of employees to have their views heard in the context of a meaningful process of consultation and discussion. ... the right to collective bargaining cannot be reduced to a mere right to make representations.” [para. 114]

In order for legislation or government action to constitute substantial interference with freedom of association, “the intent or effect must seriously undercut or undermine the activity of workers joining together to pursue the common goals of negotiating workplace conditions and terms of employment with their employer”.

Union-breaking, denying a union access to labour laws as in Dunmore, acts of bad faith or unilateral nullification of negotiated terms without any process of meaningful discussion and consultation are all examples that may significantly undermine the process of collective bargaining. But the Court also noted that “less dramatic interference with the collective process may also suffice” to establish a breach.

Ultimately, whether there is a breach must be assessed on a case-by case basis:

“the inquiry in every case is contextual and fact-specific. The question in every case is whether the process of voluntary, good faith collective bargaining between employees and the employer has been, or is likely to be, significantly and adversely impacted.” [para. 92]

Determining whether the right to bargain collectively has been substantially interfered with involves two inquiries, both of which are necessary:

1. The first inquiry relates to “the importance of the matter affected to the process of collective bargaining, and more specifically, to the capacity of the union members to come together and pursue collective goals in concert.” [para. 93] To find a breach of freedom of association, “the interference with collective bargaining must compromise the essential integrity of the process of collective bargaining protected by s. 2(d).” [para. 129]
2. The second inquiry relates to “the manner in which the measure impacts on the collective right to good faith negotiation and consultation” [para. 93]

On the first inquiry, “the essential question is whether the subject matter of a particular instance of collective bargaining is such that interfering with bargaining over that issue will affect the ability of unions to pursue common goals collectively. “ The more important the matter, the more likely that there will be substantial interference with s. 2(d). The Court stated that

“Laws or state actions that prevent or deny meaningful discussion and consultation about working conditions between employees and their employer may substantially interfere with the activity of collective bargaining, as may laws that unilaterally nullify significant negotiated terms in existing collective agreements.” [para. 96]

Where it is established that the government legislation or action affects a subject matter important to collective bargaining, and the capacity of union members to pursue common goals, the analysis moves to the second inquiry. At this stage, the question is whether the legislation or government action “respect[s] the fundamental precept of collective bargaining – the duty to consult and negotiate in good faith? If it does, there will be no violation of s. 2(d), even if the content of the measures might be seen as being of substantial importance to collective bargaining concerns, since the process confirms the associational right of collective bargaining.” [para. 97]

The Court held that “consideration of the duty to negotiate in good faith which lies at the heart of collective bargaining may shed light on what constitutes improper interference with collective bargaining rights.” In doing so, at para. 98-99, the Court drew on the principles of good faith bargaining articulated by the ILO which the Court found have been consistently incorporated into federal and provincial labour legislation:

“The principle of good faith in collective bargaining implies recognizing representative organizations, endeavouring to reach an agreement, engaging in genuine and constructive negotiations, avoiding unjustified delays in negotiation and mutually respecting the commitments entered into, taking into account the results of negotiations in good faith.” [para. 98]

The Court found that a basic element of the duty to bargain in good faith is the obligation to actually meet and commit time to the bargaining process. The parties also “have a duty to engage in meaningful dialogue and they must be willing to exchange and explain their positions. They must make a reasonable effort to arrive at an acceptable contract.” [para. 101]

The duty to bargain in good faith does not impose an obligation to conclude a collective agreement or to accept any particular contract provisions. Generally, the s. 2(d) right is not concerned with the content of bargaining. However, when the content of bargaining shows hostility from one party toward the collective bargaining process, this will constitute a breach of the duty to bargain in good faith.” [para. 104] If the employer engages in surface bargaining – if the nature of its proposals and positions is aimed at avoiding the conclusion of a collective agreement or at destroying the collective bargaining relationship – the duty to bargain in good faith will be breached. [para. 104-105]

Finally, the Court ruled that in considering whether legislative provisions violate the collective right to good faith negotiations and consultation, one must have regard for the circumstances surrounding the adoption of the law. Situations of “exigency and urgency” may affect the content and modalities of the duty to bargain in good faith. Different situations may demand different processes and time lines. The Court ruled that

“failure to comply with the duty to consult and bargain in good faith should not be lightly found, and should be clearly supported on the record. Nevertheless, there subsists a requirement that the provisions of the Act preserve the process of good faith consultation fundamental to collective bargaining. That is the bottom line.”

Even where there is a breach of s. 2(d), there may be circumstances where this is justified under s. 1 of the Charter:

“This may permit interference with the collective bargaining process on an exceptional and typically temporary basis, in situations, for example, involving essential services, vital state administration, clear deadlocks and national crisis.”

E. Application to the Facts in the Bill 29 Appeal

On the facts in the Bill 29 appeal, the majority of the Court found that various provisions in Bill 29 violated the freedom of association. The provisions which were found to be unconstitutional were those which

• voided provisions in collective agreements protecting against contracting out [s. 6(2)];
• voided provisions in collective agreements which had required the employer to consult with the union prior to contracting out [s. 6(4)];
• voided provisions in collective agreements which had provided protections in the context of layoff and bumping with the result that the employer was able to reorganize the delivery of health care services without reference to these protections [s. 4, 5, 9, 10]; and
• prohibited the parties from bargaining in respect of these issues in future rounds of collective bargaining.

The Court found that these provisions interfered with collective bargaining by disregarding past processes of collective bargaining and by pre-emptively undermining future processes of collective bargaining.

The Court found that the violations were not justifiable under s. 1 of the Charter. While the Court found that the government’s objectives to cut costs and increase management power were not pressing and substantial, the Court found the legislation did have a pressing and substantial objective to the extent that it sought to improve the delivery of health care services in British Columbia. [para. 146-147].

The Court found, however, that the Act did not minimally impair Charter rights and that the government had adduced no evidence to support a conclusion that the impairment was minimal. Instead, the government had simply asserted that the legislation minimally impaired rights. The Court ruled that “in the absence of supportive evidence, we are unable to conclude that the requirement of minimal impairment is made out in this case.” Moreover, it found that the provisions at issue bore little evidence of a search for minimal impairment: “insofar as it hammers home the policy of no consultation under any circumstances, it can scarcely be described as suggesting a search for a solution that preserves collective bargaining rights as much as possible, given the legislature’s goal.” [para. 151-154] Further “government presented no evidence about why this particular solution was chosen and why there was no consultation with the unions about the range of options open to it.”

The Court noted that while it was not ruling that legislatures have an obligation to consult, this is a factor that would be taken into account in the course of conducting the s. 1 analysis:

“Legislators are not bound to consult with affected parties before passing legislation. One the other hand, it may be useful to consider, in the course of the s. 1 justification analysis, whether the government considered other options or engaged consultation with the affected parties, in choosing to adopt its preferred approach. “ [para. 157]

. . .

“This was an important and significant piece of labour legislation. It had the potential to affect the rights of employees dramatically and unusually. Yet it was adopted with full knowledge that the unions were strongly opposed to many of the provisions, and without consideration of alternative ways to achieve the government objective, and without explanation of the government’s choices.” [para. 160]

In the result, the Court ruled that the provisions of Bill 29 violated freedom of association under s. 2(d) of the Charter and were not justified under s. 1. The Court suspended the declaration of invalidity for 12 months to allow the government to address the repercussions of the decision.

F. Equality Rights Argument

The unions in their appeal had argued that the provisions of Bill 29 discriminated on the basis of sex because they targeted only sectors of the economy that were overwhelmingly female-dominated and because they targeted pay equity adjustments that the unions had secured after many years of collective bargaining.

The Court, in five brief paragraphs, dismissed the s. 15 argument. The Court concluded that the distinctions made by Bill 29 “relate essentially to segregating different sectors of employment, in accordance with the long-standing practice in labour regulation of creating legislation specific to particular segments of the labour force and do not amount to discrimination under s. 15 of the Charter.” The Court found that the differential impact and effects of the legislation “relate essentially to the type of work [the workers] do and not to the persons they are.” [para. 165]

To view a copy of the Supreme Court of Canada decision, see below.

Paul Cavalluzzo and Fay Faraday were counsel to UFCW Canada which intervened before the Supreme Court of Canada on this appeal. For further information about the case and its implications, please contact Paul.

1. Reference re Public Service Employee Relations Act (Alberta) [1987] 1 S.C.R. 313; PSAC v. Canada [1987] 1 S.C.R. 424; RWDSU v. Saskatchewan, [1987] 1 S.C.R. 460. See also Professional Institute of the Public Service of Canada v. Northwest Territories (Commissioner) [1990] 2 S.C.R. 367
2. [2001], 3 S.C.R. 1016
3. International Covenant on Civil and Political Rights; International Covenant on Economic Social and Cultural Rights; Convention No. 87 Concerning Freedom of Association and Protection of the Right to Organize; and the Declaration on Fundamental Principles and Rights at Work.