2011 BCSC 1210 (CanLII)
Supreme Court of British Columbia — British Columbia
collective bargaining — good faith — government — wage — crisis
In light of the economic crisis in 2008, the Canadian government passed the Expenditure Restraint Act (ERA) aimed at restraining the growth of public sector compensation. It imposed a cap on wage increases for members of the federal public service and overrode any existing collective agreements and arbitration awards which were inconsistent with its terms. The plaintiffs argued that the legislation unconstitutionally breached their right to freedom of association by retroactively annulling a term in their collective agreement. The plaintiffs argued that the ERA affected them in a different manner to all other federal public servants by eliminating a pay increase awarded to them by arbitration in January 2009, but effective October 1, 2006, more than two years prior to the introduction of the ERA. They suggested that every other group who had their pay increases for the period of 2006 to 2008 determined before the introduction of the ERA in January 2009 were allowed to keep those increases, whether or not they were consistent with the salary caps set out in the ERA. The Court concluded that the plaintiffs’ action must be dismissed. The nullification of the plaintiffs’ 2006 wage increase did not interfere with their right of freedom of association because that wage increase resulted from binding arbitration. It was a term imposed on the parties and was not the product of a process of negotiation within the collective bargaining regime. Accordingly, the nullification of the term in the collective agreement did not undermine a process of good faith negotiation and consultation that had led to its inclusion in the agreement.