VI. IS THE PSSA UNCONSTITUTIONAL?

THE DECISION

Issue VI: is THE PSSA UNCONSTITUTIONAL?

Does the Public Services Sustainability Act substantially interfere with collective bargaining in Manitoba?

The arc of the law bends increasingly towards workplace justice.

issue vI:

Does the PSSA substantially interfere with collective bargaining in Manitoba, thus violating Section 2(d) – Freedom of Association – of the Charter?

A. SUMMARY OF THE DAMAGE DONE BY THE PSSA

This story has been told to me in three phases – first at trial, then during Labour’s Final Argument, and then, here, as Justice McKelvey goes through tons of the evidence showing  interference with collective bargaining that was before her.

There is so much of it, most of which we’ve already seen. Thus, I’m tempted to skip it, and just say, hey, there’s a lot of it, and as expected, the whole story incudes more. But, the latent lawyer that still lives within me remains too insistent on full coverage and completeness.

You, however, are free to scroll past it all, accepting that there are a lot of details that Justice McKelvey relied on, and found persuasive, even if I am not.

I’ve followed Justice McKelvey’s order, summarizing everything, using her voice and her words when I can. “New” stuff, in that stuff that is new to me, and presumably to you, is in green.

1. MFL

Justice McKelvey:

Kevin Rebeck testified that the PSSA caused irreparable harm and created a loss of faith within the union membership, which substantially interfered with the MFL’s ability to represent its membership. All wages and benefits were removed from collective bargaining without any meaningful consultations. Public sector wages were arbitrarily determined and imposed, and were not subject to negotiation.

The Government of Manitoba had used collective bargaining to successfully obtain wage restraints, including 0% increases in 2010.

2. UMFA

a) 2016

Justice McKelvey:

On September 13, 2016, the University of Manitoba presented a wage proposal of a 7% wage increase over four years, after 20 bargaining sessions. With an additional market adjustment (to enhance recruitment and retention), the average salary of UMFA members would increase by 17.5 % over years. UM salaries were near the bottom of similar Canadian universities, and these increases were seen as required to make UM more competitive. The President of the University had stated that the University was in a healthy financial position and these increases were a significant priority for UM.

When the Government of Manitoba learned of UM’s intentions, they advised Greg Juliano, lead negotiator for UM, that public sector wage controls were likely. On October 6, 2016, Stevenson and Irving met with Juliano and advised him that the Government was imposing a one-year wage pause (i.e. 0%). They instructed Juliano to return to the bargaining table and advise UMFA that the previous offer was withdrawn. However, Juliano was told he could not say anything about the Government’s involvement.

On October 24, 2016, Juliano wrote to Irving as follows:

The University fully appreciates the difficult financial situation that the new government finds itself in, and the desire to avoid precedence in settlements which could drive up overall public sector labour costs. However, given that our negotiations with our faculty union have progressed so far, complying with the Government’s wishes would mean moving backwards from previous offers, and expose the University to a claim of “bad faith bargaining” while severely damaging our relationship with faculty members and our six unions.

The University feels that it cannot commit to doing something illegal, which would have serious consequences for our community, unless we have a credible defence and explanation. Therefore, if the government wants the University to bring our faculty bargaining process in line with its new mandate, we are going to need a strong statement from Government that this is a directive.

(In other words, please don’t make us do this illegal and harmful thing, and if you are, then you should at least take responsibility.)

We believe the following points would be important to communicate:

The Government of Manitoba is instructing the University of Manitoba and all public sector organizations with contract negotiations ongoing or upcoming to implement a minimum one-year wage pause; meaning a 0% general increase in the first year of a new agreement.

In some cases, Government will permit a multi-year contract, where compensation subsequent to the pause is more modest than has been the case during the past few years (under the 2% increases that have been common), and there is a demonstrated plan which can realize actual savings sufficient to fund the increase.

(Translation: At least tell our faculty that this is something that will apply to the whole public sector, not just them, and that, despite the freezes, there is hope.)

Of course, we all know that Juliano’s pleading fell on deaf ears. So, what happened next?

Justice McKelvey:

Irving replied that anything more than the one-year pause year would require the permission of the Public Services Compensation Committee. He also stated that in the Government’s view, this would not be bad faith bargaining.

There were other meetings and communications between the PSCC and UM representatives, including President Barnard, where UM begged the Government reconsider, citing the devasting effect on the University this approach was expected to cause. The Government did not respond to these requests for reconsideration.

On October 21, 2016, Juliano told UMFA that he was frustrated due to his dealings with the Government, but that he could not share the details. On October 27, 2016, the day the mediation commenced, UM informed UMFA that the previous offer was withdrawn, and they could only agree to a one-year agreement with a 0% wage increase.

UMFA was shocked and frustrated. The mediator said that if he had known that this was going to happen, he would not have bothered coming. The mediation continued, but on the understanding that UMFA was reserving its right to bring a complaint of an unfair labour practice.

It was clear that both the UM nor UMFA were upset and objected to the situation. On October 28, 2016, they issued a joint statement as follows:

After one day of productive mediation, the University of Manitoba and the University of Manitoba Faculty Association (UMFA) have agreed to communicate jointly to the University community about a dramatic recent development in our ongoing efforts to negotiate a new collective agreement.

From the University of Manitoba’’ perspective: Over the past several days, the Province has made clear to the University that it has established fresh mandate parameters that seek cooperation in achieving a compensation “pause” throughout the public sector. Public bodies, including the University of Manitoba, are being asked to extend existing contracts for an additional year at zero per cent in order to stabilize public sector compensation levels.

We find ourselves in the unusual circumstance of having a newly articulated Provincial mandate regarding public sector compensation levels that will have a profound impact on the final compensation levels that we will be able to negotiate, despite having already made what we believe to be a fair and reasonable offer on September 13, 2016.

From the University of Manitoba Faculty Association’’ perspective: This 11th hour action represents illegitimate government interference in a constitutionally-protected process of collective bargaining. Mediation continues, and our focus is to advance our Members’ priorities through that process. The UM is an independent body whose Board must have the autonomy to engage in all aspects of negotiation. The Province has unnecessarily endangered a complex negotiation through this misguided interference, and its action has jeopardized the educational goals of every UM student. UMFA is currently exploring legal options, and continues to focus on negotiating a fair deal for its members.

UMFA went on strike on November 1, 2016. It was only the third strike in UM’s history. The strike ended on November 20, 2016. The parties were able to come to some agreement on non-monetary issues, with small gains in areas like workload, metrics, and collegial governance. UMFA’s members were extremely frustrated, it’s trust in its union representatives was shaken, and the relationship with UM was weakened as a result of what had transpired.

UMFA filed an Unfair Labour Practice complaint with the Manitoba Labour Board. The MLB issued a lengthy decision (Order No. 1651), finding that UM had committed an unfair labour practice which interfered with UMFA’s rights and ability to bargain collectively.

The MLB was satisfied that UM had failed to disclose relevant information on a timely basis and was not transparent during the bargaining process. UM was ordered to pay a financial penalty — 2.5 million dollars, along with an apology to UMFA and all employees in the bargaining unit.

b) 2017

Justice McKelvey:

The one-year agreement that had been agreed to in 2016 expired in March of 2017. UM immediately made an offer consistent with the PSSA pattern, even though the PSSA was only a bill at the time, Bill 28, and was not enacted until June 1, 2017. All of the University of Manitoba’s bargaining communications were made essentially on the basis as if the PSSA was already in effect.

UMFA’s biggest priority continued to be wages and the UM continued to be ranked at the bottom in terms of salaries. UM continued to maintain that even if they agreed to wage increases higher than the PSSA, those gains would be clawed back once the PSSA was proclaimed due to the retroactivity provisions.

An agreement was eventually reached, with UMFA assenting to the PSSA wage limitations under duress. UMFA reserved its right to reopen any and all portion of the agreement if the PSSA was held by a court to be unconstitutional. 

The ballot ratifying the agreement read as follows:

I accept the proposed collective agreement with the proviso that I understand that the wage rates and benefits of any kind found in it are imposed as a result of The Public Services Sustainability Act (Bill 28) and not freely collectively bargained as between my union and my employer.

My acceptance is therefore conditional on the legal validity of The Public Services Sustainability Act, and subject to revisions of the collective agreement if the Act is found to be unconstitutional.

Feedback from UMFA members expressed a lack of confidence in the bargaining unit, and dissatisfaction with paying dues to a union when bargaining priorities could not be addressed. There was again perceived damage to the union’s relationship with its members in the long-term.

3. UNIFOR and the U of M

Justice McKelvey:

Unifor Local 3007, representing 450 members at UM, served a notice to bargain on January 9, 2017. UM bargained as though the PSSA was already in effect, even though, at the time, the PSSA was neither passed nor proclaimed.

Unifor’s negotiation package included several monetary proposals, but, at the table, UM’s Chief Negotiator, Lisa Halket, advised that the UM would not be bargaining on anything outside of Bill 28 (the PSSA).

A new agreement was entered into with wage increases consistent with the PSSA. Unifor’s negotiator, Ken Stuart, said that this had caused permanent harm to Unifor’s relationships with its members, and was of the opinion that there had not been free bargaining. Unifor did not recommend accepting or rejecting the agreement, although members were told about how Bill 28 had affected the union’s ability to negotiate for wage increases and benefits, particularly in light of the claw back provisions.

This ratification ballot also included a proviso that there hadn’t been free bargaining, and that revisions would be sought if the constitutional challenge to the PSSA was successful.

12. MANITOBA TEACHERS SOCIETY

Justice McKelvey:

There are 38 teachers’ associations in the Province of Manitoba. Each negotiates its own collective agreement, and all of them were set to expire on June 30, 2018. Although teachers cannot strike, they can go to binding arbitration if an agreement cannot be reached.

On February 8, 2018, the Government announced that they planned to change to a central bargaining structure, which would eliminate the 38 associations, and set up a central bargaining table. MTS was not advised of this plan until one hour before the news conference.

(What the? I hadn’t noticed this before. Kinda weird. Why would you do that? What’s wrong with letting each school division make individual choices that work for them?)

It was during this press conference that the Minister of Education spoke as if the PSSA had already been proclaimed.

(Huh. That’s a quietly tactful way to refer to those dumb statements where Minister Wishart and Richard Yang essentially said – hey, it’s Ok if we cap school property taxes at 2%, we already saved you all that money be freezing teachers wages.)

Tom Paci of the Manitoba Teachers Association testified that there is usually a lead table that sets a pattern for the rest of the 38 bargaining tables, and that, binding arbitration is rare. It is a costly process and has only occurred 10 times since 2000. Prior to 2017, the government has never set a mandate for the school boards, nor has the Province ever had any role at the bargaining table.

The collective agreements expired in June 30, 2018, with the PSSA creating uncertainty and with the government at the bargaining table for the first time.

(Oooh, Justice McKelvey just slides that in. The government has been vehemently denying that they were at any of the tables. They claim they were just innocently setting mandates.)

The MSBA didn’t want to bargain because of the PSSA and the retroactivity provisions, as well as a pending civil election. The MTS’s position was that the PSSA was not law and violates the Charter. Furthermore, in MTS’s view, the government was interfering. The MTS viewed the PSSA’s wage freezes as wage reductions due to inflation, and while they were open to collective bargaining on some level, the MTS wasn’t prepared to consider accepting predetermined wage limits.

As a result of the impasse, arbitration dates were set for the Louis Riel and Pembina Trails School Divisions. The estimated cost of each arbitration is around $100,000.

13. OTHER UNIONS

a) Generally

Justice McKelvey:

Many other unions were also impacted by the introduction of the PSSA, although they have not been documented in these reasons. Some haven’t started bargaining, some haven’t settled on a collective agreement, and some have capitulated, accepting the PSSA pattern but under duress with a conditional ballot.

b) PARIM

Justice McKelvey:

When the Professional Association of Residents and Interns of Manitoba was confronted with a PSSA mandate, PARIM triggered binding arbitration. The arbitrator awarded PARIM wage increases in excess of the PSSA maximums, as well as other monetary benefits to be made retroactively.

c) Doctors Manitoba

Justice McKelvey:

The collective agreement with Doctors Manitoba allows for amounts over and above the limitations in the PSSA. Additional investments made by the government resulted in increased compensation for certain members. Since those investments were expected to be offset by savings from reduced costs in six specific areas, the government argues that this demonstrates that “sustainability savings” are possible.

But there was no specific costing or allocation of the costs savings, and the additional monies were not contingent on the cost savings actually being realized. This is very different from the PSSA, where the costs savings must be identified, (and must actually occur), and only a portion is allocated to the unions (and no more than 50%), all subject to approval by the Treasury Board (not required in the Doctors Manitoba agreement).

Furthermore, Section 14 (the section on sustainability savings) is in Part 2 of the PSSA and therefore does not apply to the Doctors Manitoba agreement, which falls under Part 3 of the PSSA (professional entities). In addition, the Doctors Manitoba agreement on costs savings covers all four years of the agreement (whereas sustainability savings under Section 14 are only available for years 3 and 4 of any agreement).

As a result, this court concludes that the government’s reliance on this agreement as an example of negotiated sustainability savings is superficial at best.

(Hmmm, I think she really mean specious, stupid, and stupendously silly. Damn autocorrect. It’s so diplomatic at times.)

4. MGEU

a) Michelle Gawronsky

Justice McKelvey:

Michelle Gawronsky is the President of the MGEU. She testified that in the past, she has regularly met with the Premier, Cabinet, and MLA’s with respect to labour issues, but, since this government was elected in April of 2016, she has only met with the current Premier once, on November 1, 2016.

Since the 1990’s, there has been a 20-day voluntary work week reduction program without pay. On February 22, 2016, the Public Services Compensation Committee approved a recommendation to discuss making the program mandatory. Stevenson raised this again with Gawronsky in an email dated June 12, 2017. This request was rejected by Gawronsky on June 23, 2017, due in part to the potential impact that the PSSA would or might have to the next MGEU agreement (known as the GEMA), to be negotiated in 2019.

Gawronsky expressed frustration with an inability to sit down with the Premier and/or Cabinet to resolve labour issues, before they become more acute. During the FWG meetings, she offered to meet with government representatives to discuss efficiencies, but no one took her up on these offers.

b) The GEMA

Justice McKelvey:

The GEMA that covered the period 2010-2014 included two years of wage freezes and a 2.75% increase thereafter. But those wage freezes were traded for gains on issues like: special wage adjustments, and increases to vision care and the drug plan, as well as a guarantee on job security that no regular employees hired on or before March 10, 2010 would occur during the duration of the agreement.

When the GEMA expired in March, 2019, Sheila Gordon, for MGEU, began negotiating with Brian Ellis, for the Government of Manitoba (Labour Relations Division). Gordon immediately asked whether the PSSA 0% wage freezes would apply, because if they were, there would be no point in bargaining.

It is not unusual for the parties to meet as much as 30 times during bargaining a new GEMA. Normally, monetary issues are left to the end because non-monetary issues are less charged, and agreement on those issues builds trust and creates momentum. As a result, the Government normally doesn’t provide a mandate on wages to its bargaining team until closer to the end of negotiations.

When the parties exchanged proposals on April 10 and 11, 2019, the MGEU identified its top priorities as wages, benefits, and job security, as well as a depletion of 2,000 positions due to privatization and retirement vacancies. The MGEU deemed it critical to know at the outset whether the PSSA would apply or not, because if it did apply, it would not only turn the process on its head, it would, in the MGEU’s view, make it impossible to come to an agreement due to the priorities identified by MGEU’s members.

After learning that the PSSA would govern

(hmmm, an interesting way of putting it, since Ellis didn’t really respond, and Gordon said – ok, then, we assume the PSSA will apply. But, Ok Justice McKelvey, we’ll take it),

the MGEU asked for arbitration under The Civil Service Act. Ellis disagreed with MGEU resorting to that process, and expressed cautious optimism that the government might relax its position and allow bargaining on wages.

(Hey, where’s the stuff on Ellis’s sleazy and bogus threat?)

When the Minister of Finance refused to appoint an arbitration board, the MGEU brought an application for mandamus, and Justice Brenda Keyser granted that application and ordered the Minister of Finance to proceed with arbitration on April 16, 2020.

c) Other MGEU Agreements

i) Generally

Justice McKelvey:

Some of the MGEU agreements have been concluded at levels exceeding the PSSA limits. These were to correct inequities between bargaining units doing the same work that occurred due to timing of the legislation or because of the healthcare sector reorganization. However, Gordon testified that the PSSA mandates will apply to these units at a later point in time.

Gordon also testified that wage restraint legislation is generally unnecessary, because wage freezes can be obtained through free collective bargaining, as in 2010, for example. However, when wage freezes are negotiated, the MGEU can obtain other benefits, like job security, but, because of the PSSA, those kinds of trade-offs are not available. As a result, the PSSA causes the MGEU to lose all of its bargaining power or leverage to negotiate gains for its members.

ii) DSM (Westman Labs)

Justice McKelvey:

Westman Labs was required to comply with the PSSA, even though its two sister agreements were not, and had been concluded with significantly higher wage increases and benefits. This was due only to an accident of timing, in that the other two agreements had been concluded, but the Westman Labs negotiations were still open when the Government began developing the PSSA.

Although Westman Labs had received assurances that all three agreements would be the same, it became clear from the situation between UM and UMFA that the Government of Manitoba was going to be strict about wage freezes in the public sector.

Westman Labs employees were frustrated and angry about the inequity that resulted, blamed the union, and, in Gordon’s opinion, the situation caused long-term harm to the relationship between the MGEU and its members.

An agreement consistent with the PSSA was concluded under duress, but the Government of Manitoba eventually recognized the inequities, and changed the Westman Labs agreement to be consistent with the other two agreements. However, all three agreements will be subject to the PSSA restrictions at a later date.

iii) Direct Support Workers

Justice McKelvey:

One classification of these workers was paid $11.01/hr, but the minimum wage had increased to $11.18. The employer asked what to do because increasing this group’s wages to the minimum wage would violate the PSSA. The government eventually advised that they would approve the increase.

None of the Direct Support Workers had received a wage increase since March 2014. Therefore, the union expected that there would be fair and reasonable wage increases, and proposals were made for monetary benefits. The employer, however, took the position that the PSSA applied, and that no monetary benefits were possible because of the claw back provisions.

In Kara Steele’s (negotiator for the workers) view, the PSSA removed any incentive for the employer to bargain on non-monetary terms as well.

The power to negotiate was adversely impacted.

(The way this reads, this is a finding of fact, a conclusion by Justice McKelvey, as opposed to merely the opinion of the negotiator. Doesn’t really matter. Since Justice McKelvey agreed with the unions, those opinions are all the same.)

Very few benefits, apart from the increase to minimum wage, were achieved. Although the union was given credit for the two years of wage freezes they had already experienced (in the previous agreement), the final agreement was PSSA compliant in every other respect.

The agreement was ratified with a conditional ballot with respect to the constitutionality of the PSSA.

iv) EMS Superintendents

Justice McKelvey:

Due to timing of their negotiations, EMS Superintendents faced being paid less that the paramedics they were supervising because of the PSSA restrictions on wages.

As the negotiations began, the union was told that the PSSA would apply to them. The union negotiator, Darlene Arnott, described this as arbitrary, inequitable, and unjustified. It created significant morale issues and harm to labour relations.

The situation was rectified during collective bargaining and the EMS Superintendents were exempted from the PSSA.

Although initially the Superintendents were warned not to spend the increase in wages, as it was not clear whether the claw back provisions would apply, the Government eventually confirmed that the agreement was approved and that the claw back provisions would not apply.

(OMG. I need an eyeroll emoji.)

v) The Main Street Project

Justice McKelvey:

The MGEU gave notice of an intention to bargain on February 29, 2016. Although there was a delay in commencing negotiations, by August 29, 2017 there had been 10 meetings. The employer’s bargaining position was consistent with the PSSA. MSP wanted wage increases of 2% per year, with improvements to other monetary benefits, such as sick leave, etc.

No collective bargaining occurred with respect to monetary benefits, and no agreement was secured on any relevant non-monetary issues, such as a permanent shift schedule, job security, and other matters. The MGEU negotiator said that the PSSA had negatively impacted the union’s ability to negotiate for non-monetary gains as well.

MSP workers had agreed to wage freezes during their previous agreement which covered 2012-2016.

The final agreement included a partial exception to the PSSA. The final agreement exceeded the PSSA requirements, with a pattern of 0%, 0%, 2%, 2%, and the employer was given a letter that promised that these amounts would not be clawed back once the PSSA was proclaimed.

vi) Hospital Trades

Justice McKelvey:

The Hospital Trades workers (trades groups at St. Boniface Hospital, the St. Amant Centre, and Victoria Hospital) were waiting to negotiate their next agreement until after the operating engineers unit had concluded its agreement with the WRHA.

On April 20, 2018, the lead negotiator, Darlene Tremblay, received a call from the PHLRS. The PHLRS representative said that there was a small window for them to offer wages over the PSSA – a pattern of 2%, 0%, 0%, with a guarantee of no claw back once the PSSA was proclaimed. This was identical to what had been offered to and accepted by the operating engineers.

When the parties met from May 8-10, 2018, the MGEU was told that the deal had to get done by May 18, 2018. This was essentially a take-it-or-leave-it offer with a short acceptance window.

The MGEU was upset that it was not able to put forth any proposals, nor negotiate for anything. Even though they were frustrated and unhappy with the offer, they realized that the 2% increase would be gone if not accepted.

The offer was accepted after a guarantee from Elizabeth Beaupre that the PSSA would not apply, and the there would be no claw back once the PSSA was proclaimed.

vii) Red River College and Assiniboine College

Justice McKelvey:

Marc Payette was the MGEU negotiator that handled these negotiations. These employees had agreed to wage freezes in exchange for no lay-off clauses in their 2009-2013 and 2013-2017 agreements.

However, when the employers relied on the PSSA limitations in the 2017-2021 agreements, the union wasn’t able to get any increases in wages above the PSSA, and were also unable to get any guarantees on job security.

(Unless my addition is wrong, this means that the RRC and ACC had wage freezes for 10 years. At least in the first eight, they got a guarantee that there would be no layoffs. But under the PSSA, this was not possible. Their wages just got frozen.)

The agreements were ratified on the basis of a conditional ballot referring to the constitutional challenge to the PSSA.

viii) Manitoba Liquor & Lotteries – GOLICO

Justice McKelvey:

The union’s priorities were wages, benefits, and job security, especially with respect to contracting out. The union tried to bargain on non-monetary issues, especially job security, and considered these reasonable trade-offs for wage freezes. However, the union was unable to obtain any of these gains, leaving the union representatives feeling embarrassed that so little had been gained.

Although the MGEU issued a bargaining bulletin which tried to portray the negotiations in a positive light to boost morale, the lead negotiator, Miranda Lawrence, claimed that it greatly overstated the achievements in the agreement. For example, although the bulletin described the contracting out language as a “big gain”, the union was of the opinion that it was very small. Maintaining the status quo on benefits like the fitness allowance, was described as “preventing rollbacks and concessions.” And the strengthened language on harassment was something union members were already entitled to under other Acts.

Nothing with “an essence of monetary” was available to be negotiated, and none of the negotiated improvements reflected any of the union’s priorities.

This agreement was also approved with a conditional ballot.

ix) DOCFS

Forgive me, but I could not find any explanation of what DOCFS means. Department of Child and Family Services workers, maybe? 

Justice McKelvey:

This was a new bargaining unit certified in June of 2016.

The union wanted to bargain a variety of monetary issues, including wages, bank time, salary scales, merit increases, etc. The employer refused anything that would not be compliant with the PSSA, specifically referring to the fact that anything above the PSSA would create a debt that would be clawed back once the PSSA was proclaimed.

Darlene Arnott was also the lead negotiator for the MGEU in these negotiations. She testified that the MGEU also wanted to bargain on non-monetary issues, but they were unable to because the employer had little incentive to negotiate on these issues due to the PSSA.

In Arnott’s opinion, the desire to unionize to improve terms and conditions had been defeated, creating frustration and dissatisfaction with unionizing and paying dues. Internal tensions had created morale, recruitment, and retention issues.

13. OTHER UNIONS

d) Agreements Outside the PSSA

Justice McKelvey:

As indicated, there have been a number of agreements ratified since March 2017 that are not reflective of the PSSA, including:

1. MGEU/Westman Labs;

2. CUPE/Rehabilitation Centre for Children;

3. IATSE/Centennial Concert Hall;

4. LALA/Legal Aid Lawyers’ Association;

5. IVOE/WRHA Operating Engineers.

Many of those agreements will be impacted by the PSSA when their next collective agreement is negotiated, and many were made (as exceptions to the PSSA provisions) in an attempt to align wages between groups who perform similar workplace functions.

5. CUPE

a) Rehabilitation Centre for Children

Justice McKelvey:

An agreement was reached that exceeded the PSSA terms to have parity with MAHCP workers doing the same work.

However, the PSSA will apply to the next agreement.

b) Community & Intercultural Workers –  Winnipeg School Division

Justice McKelvey:

Elizabeth Carlyle testified that CUPE was told that the PSSA would apply to the WSD even though it had not yet been passed, nor proclaimed. Union members were disillusioned.

The parties met after the PSSA was passed. The WSD said that it would discuss monetary matters after bargaining on non-monetary matters had been concluded. Although this was the usual practice, CUPE concluded that there would be less incentive for the WSD to provide non-monetary benefits when the PSSA had pre-determined all of the monetary issues.

CUPE requested improved job security provisions. The WSD declined. Carlyle indicated that improved job security is usually traded for reduced compensation. This didn’t happen here (due to the PSSA).

The WSD cancelled a bargaining session scheduled for September 26, 2017, and the parties have not met since.

Carlyle indicated that in her opinion, the PSSA has had a negative impact on collective bargaining, including restricting the ability of CUPE to negotiate and advance the priorities of the union membership.

c) Long-Term Health Care

Justice McKelvey:

Arlingtonhaus, Extendicare, and Revera were all told by Teri Kindrat that they had to comply with the PSSA.

Arlingtonhaus’s CEO told Kindrat that they had already met with the union. When the union asked what the situation was with the PSSA, the CEO told the union that Arlingtonhaus had been directed to comply with the PSSA. CUPE replied saying that the PSSA should not apply because it hadn’t been proclaimed and was being challenged legally. CUPE also warned the CEO that this was probably an unfair labour practice. The CEO asked Kindrat for advice about how to respond.

Teri Kindrat replied as follows (we’ve already seen this in Labour’s Read-ins and One Last Reveal):

The discussions that we have been having over email and on our conference call to look at the potential impact of Bill 28 are very different discussions than how I would have suggested you actually verbally present the current reality to the union at the bargaining table.

I would definitely have preferred to have had some input on that opening statement and how you would have specifically presented these issues at the table.

In my brief conversation with Kim the other day I did make a comment about not actually referencing Bill 28 to the union but I did not realize that your bargaining was actually happening in the next day or two so I did not push the issue further or provide more clarity. I did reference that at other bargaining tables we had started with a reduced mandate or something like 0%, 0.5%, and 0.75% to talk about the financial challenges.

At the other tables that the PHLRS has been doing we have been speaking about the “provincial financial challenges” and the “available funded mandate”— with no actual reference to Bill 28 at the bargaining table so that we would avoid this type of response.

Your opening statement is quite likely an unfair labour practice.

I am going to give some thought to possible next steps on this one to try and get this back on track in the right vein of messaging.

These employers all insisted on compliance with the PSSA, even though the act had not yet been proclaimed. Extendicare was a for-profit facility that was able to provide higher wages. In respect of Revera, the employer was relying on the PSSA, even though it meant that one local would be making substantially less than their colleagues doing the same work at other Revera facilities. As a result of these experiences, CUPE was of the opinion that the PSSA substantially interfered with free and fair collective bargaining.

Once it was confirmed that the PSSA did not, in fact, apply to these employers, agreements were made that were in excess of the PSSA provisions (indicating that the PSSA limitations are far below the ‘going rate’).

Thus, it was only after the PSSA was no longer in the picture that meaningful collective bargaining could commence.

6. IATSE

Justice McKelvey:

When the IATSE agreement with the Manitoba Convention Centre Corporation expired in 2015, the parties agreed to wait until another agreement was concluded between the MGEU and the MCCC. By the time that agreement was done, and the IATSE started bargaining, it was September of 2016 and the employer advised the union that they were now bound by the PSSA, and thus could not offer an agreement on terms equivalent to the MGEU-MCCC agreement.

This was unacceptable to the union representatives, who stressed that not having parity with the MCCC employees doing the same work would have a tremendous impact on employee morale.

A solution was reached whereby the IATSE agreement was fictionally deemed to be in effect on March 19, 2017, the day before the PSSA was introduced in the legislature. Although this avoided having the PSSA apply to the IATSE agreement covering the period from 2015-2020, the result is that the PSSA sustainability period will not begin for IATSE until February of 2021, and not end until February of 2025, a full eight years after the PSSA came into being.

7. MACHP

a) Psychosocial Clinicians and Support Care Coordinators -–CancerCare

Justice McKelvey:

MAHCP had an existing agreement with CancerCare covering other CancerCare employees. The union wanted these CancerCare employees to have the same deal as the others.

The PHLRS, however, proposed that the agreement would be the same as the other agreement, except for the monetary provisions, because of the PSSA. Although the union objected, suggesting that parity would be appropriate, the PHLRS didn’t respond until they made a “unique” proposal of a one-year 2% wage increase retroactive to April 1, 2017 that had to be accepted right away.

This proposal would not achieve parity with the employees’ counterparts, and a wage gap would continue to exist. However, the union representatives felt that they had to accept it or face PSSA wage freezes, even though their members would be frustrated.

The agreement was ratified under duress with a conditional ballot.

b) Imaging Equipment Service Technologists

Justice McKelvey:

These employees were also given a one-time, take-it-or-leave-it offer of a 2% wage increase.

The frustration of union members was evident and the agreement was also ratified with a conditional ballot.

8. IUOE 837

Justice McKelvey:

Marc Lafond represented eight bargaining units, each with a collective agreement for maintenance and trades workers at Manitoba Healthcare facilities.

Some bargaining had occurred, when, on November 3, 2016, the employer offered a one-year wage pause (consistent with the one-year pause plan that preceded development of the PSSA). This mandate came from the Public Services Compensation Committee and was relayed by Gerry Irving.

The union was angry because this was less than what similar bargaining units had received. As a result, all negotiation ceased, and did not resume until February 21, 2018, when the employer made a “best case” offer on wages which had to be accepted by February 28, 2018. This offer also included other concessions that the employer wanted.

The union initially declined because it the government wouldn’t confirm in writing that the wage increases wouldn’t be clawed back under the PSSA, and because they thought it was indecent for the employer to insist on monetary restrictions as well as requiring other concessions.

The union accepted the offer the second time it was offered, however, because Beaupre confirmed in writing that the two years of zeros in the offer would be counted as part of the PSSA pattern and that there would be no claw back of the increased wages in the first year.

Although a tentative memorandum of settlement was made on April 27, 2018, the union subsequently provided a notice to bargain a renewed collective agreement. However, no bargaining has taken place.

(I take it that the union has just decided to wait until after the constitutional challenge is decided before finalizing anything.)

9. PSAC – Brandon University

Justice McKelvey:

PSAC was told that the PSSA would apply to the negotiations. The union replied that free and fair bargaining should occur on everything.

Monetary issues were deferred until after the PSSA was enacted. The union asked whether any monetary terms could be negotiated, as wages in particular were of high priority. Brandon University’s representative said that no monetary issues could be negotiated because of the PSSA, even though it hadn’t been proclaimed.

An agreement according to the PSSA was reached and conditionally accepted by PSAC members with respect to the legal validity of the PSSA.

The union representatives felt that this affected the union’s relationship with their members, particularly since this was a relatively new union (certified in 2012). They also opined that this was not a freely bargained collective agreement, but was rather imposed on them by the PSSA.

Brandon University took the position that there had been free bargaining, and indicated that they reserved the right to oppose any attempt to reopen the collective agreement.

10. UFCW 832

a) Assisted Living Employees

Justice McKelvey:

Collective bargaining for three workplaces began just before or just after the PSSA was tabled in the Legislature. No one was sure whether the PSSA applied to them or not. Employers were reluctant to discuss monetary terms until they received confirmation from the Government on this point.

This created uncertainty, delays, and frustration. The unions say that it has harmed their relationship with their members.

The union had agreed to wage freezes before, but had been able to get other concessions in return. The union was concerned that they would not be able to get any enhancements in exchange for wage freezes if the PSSA applied and all monetary issues were pre-determined.

The union’s position was that the PSSA didn’t apply. The employers have remained unwilling to discuss monetary issues without clarification from the Government.

(OMG. It looks as though the Government has never bothered given them this clarification, and so these negotiations have just remained in limbo.)

b) Education Workers at Fort LaBosse School Division

Justice McKelvey:

The MSBA indicated that the PSSA would apply, and that they were concerned about the retroactive claw back provisions. Their offer was, accordingly, compliant with the PSSA.

Phil Kraychuk, the lead negotiator for the union, testified that their members were angry because wages were their top priority.

Although minor improvements were achieved, collective bargaining was adjourned in the Fall of 2017 and has not resumed. The union has reached out twice since then to ask whether there is any possibility for there to be movement on monetary issues, the FLBSD has not responded.

The FLBSD has not received a mandate from or been directed by the Public Services Compensation Committee with respect to the position it should take at the bargaining table.

11. BUFA

Justice McKelvey:

BUFA’s collective agreement expired on March 31, 2019, and thus the renewal was negotiated after the PSSA was passed.

Jon-Tomas Godin, BUFA’s representative estimated that the PSSA would result in a 10% wage reduction over the four years due to inflationary increases in the cost of living.

BUFA suggested that there could be a five-year agreement that would have a significant wage increase in the fifth year to make up for the PSSA limitations. The Government of Manitoba refused to allow this. However, the parties did agree to have wages reopened in the fifth year, which would be in effect a new negotiation on wages without any guarantee of a limit or an increase.

Both BU and BUFA acknowledged the detrimental effect of the PSSA on their bargaining. Godin acknowledged that some (minor) gains were made, including on family leave, an increase in research days from 5-10, and the establishment of working groups to explore certain issues.

BUFA members ratified the agreement under duress and the ballot included a statement that the agreement had not been freely bargained and that acceptance was conditional on the legal validity of the PSSA. BUFA was also able to obtain Section-Specific Re-Openers, that allowed them to reopen certain matters should the PSSA be found to be invalid.

Whew. Ok. So, there you go. Look at that long large mess. Pretty clear evidence that even though the PSSA wasn’t legally in effect, it was certainly going around and affecting everyone and everything in the public sector.

B. EXPERT EVIDENCE ON LABOUR RELATIONS

We have one more section on the evidence before we get to Justice McKelvey’s analysis of whether the PSSA substantially interferes with collective bargaining in Manitoba. What the Justice McKelvey said about the experts is an important piece, at least for labour lawyers looking to bring similar cases.

For interested normies, however, it’s just another overview. Her summary of Dr. Hebdon’s evidence is very similar to mine (which only means that I listened good). Her coverage of the Other Guy’s testimony includes some of the references Shannon Carson used to challenge him in cross-examination, which I didn’t have before. Those are worth the chuckle.

1. Labour’s Expert – Dr. Hebdon

a) General Principles

Justice McKelvey:

As Dr. Hebdon testified, the right to strike and seek arbitration are dispute resolution mechanisms that put pressure on the other party. The threat of strikes results in about 95% of labour disputes in Canada being resolved by freely negotiated agreements.

Although there are many different negotiation strategies, the trust relationship between the parties involved is very important. A positive relationship results in the effective implementation of a collective agreement, as it produces better outcomes and higher productivity.

According to Dr. Hebdon, there are distinct stages in the collective bargaining process. After getting input from their respective constituents, proposals are exchanged. Negotiation usually begins with non-monetary issues. This can produce positive momentum and makes sense strategically, since there may be important non-monetary issues which can be bargained before and during a consideration of monetary issues. There is a constant reassessing and re-evaluation of the parties’ positions – items to be negotiated are dropped, solidified, or a consensus reached.

As Dr. Hebdon indicated in one of his reports,

If wages and benefits are resolved, the parties are likely to encounter difficulties in generating support for any non-economic issues. To put it simply, neither side will want to lock out or strike over issues of lesser importance. In addition, with monetary issues settled the union will have suffered a significant loss in bargaining power.

Wages are usually the most important issues for unions. Dr. Hebdon estimates that wages are the top priority in as much as 77% of strikes.

In Dr. Hebdon’s opinion, a freely negotiated agreement is the optimal resolution as it creates ownership for everyone involved (which makes it more likely that they will comply with it). Imposing a settlement, through wage restraint legislation for example, has a negative impact on the relationship between the parties, and may “chill” the process in the future. Members may perceive the union as having lost bargaining power, leading to an expectation of future freezes.

Dr. Hebdon’s research has demonstrated that imposing wage restraints increases the probability of impasses occurring in subsequent rounds, because:

Government intervention not only discourages free collective bargaining in a tough climate of restructuring and economic pressures but, understandably, it creates a cynicism on the part of unions and employees toward the institution of collective bargaining.

There is evidence in this case of cynicism, distrust and frustration on the part of the unions, as illustrated in the Affidavit of Sheila Gordon and others who have testified. Anger over the UMFA negotiations was particularly apparent.

(Oh-oh. A finding of cynicism. So much for the government’s attempt to characterize Dr. Hebdon’s discussion of “cynicism” and such as personal or subjective opinions.)

b) Application to the PSSA

Justice McKelvey:

Dr. Hebdon concluded that, because the PSSA effectively excludes collective bargaining with respect to wages and other monetary benefits, meaningful collective bargaining in Manitoba is untenable, because:

  1. Monetary issues are pivotal to the bargaining power of both parties, thus by pre-determining wages in favour of management the union is left with almost no bargaining power on non-monetary issues.

(Hey, this is something I didn’t realize before. Wages and money aren’t really taken out of the agreements, they are taken out of the bargaining process. As a result, wages and other monetary benefits are already written into the agreement, pre-determined in favour of the employer, and eliminating any bargaining power the unions might otherwise have in relation to them. On that basis, any attempt by the Government of Manitoba to suggest that the unions don’t lose bargaining power, is, as we have already seen, specious, silly, and not at all believable.)

  1. Unions will be unable to get agreements that reflect their members’ priorities, which will damage their relationships with their members. The evidence at trial demonstrated that frustration and cynicism had taken root in Manitoba’s public sector.
  2. MGEU’s agreements in 2010 demonstrate that 0% wage increases can be freely bargained, and ultimately accepted. However, these were traded for enhanced job security. When wage freezes are imposed, these types of trade-offs aren’t possible; the employer has no incentive to provide them (or even bother talking about them).
  3. Strikes will be futile, as they cannot be used as leverage to obtain better wages and other monetary benefits.

In Dr. Hebdon’s view, the Government had other options available to them. Wage restraints could have been obtained through hard bargaining, emphasizing the need for financial restraint, allowing the union to trade off lower wages for other benefits, such as job security. Cooperative bargaining, where the employer opens the books to demonstrate financial need and the union agrees to lower wages for the benefit of everyone, also could have been used.

Dr. Hebdon acknowledged that the PSSA allowed for collective bargaining on non-monetary matters, and that non-monetary matters can be important, sometimes more than money, But, in his opinion, it is rare to see non-monetary gains when all money has been taken off the table. For example, although non-monetary gains were achieved in the GOLICO agreement, as well as in the UMFA, BUFA, RRC, and ACC, they were described as minimal, and even once as embarrassing (GOLICO).

According to Dr. Hebdon:

(1) The best collective agreements occur when monetary matters are on the table.

(2) The PSSA tilted the balance unfairly towards employers. And,

(3) It may take a very long time to repair and heal the many damaged relationships that have resulted.

c) Sustainability Savings

Justice McKelvey:

Under Sections 13 and 14 of the PSSA, the parties can agree to monetary increases in the third and fourth year of a collective agreement (only), but:

  1. Those increases must be funded by savings that have resulted from negotiated ways to reduce costs;
  2. The unions are only entitled to a portion of those savings (and the Government said elsewhere that it would be no more than 50%); and,
  3. Regardless of what any agreement says, any increases due to the unions because of sustainability savings have to be approved by the Treasury Board.

Dr. Hebdon’s view was that the probability that any increases due to sustainability savings would actually occur was very low, in part because the Treasury Board has the absolute power to decide whether to approve them, and in part because there is no incentive for anyone to negotiate for them.

Dr. Hebdon explained that the Government of Manitoba would not want expand the scope of a collective agreement to include new areas which could lead to sustainability savings. This would take these new areas out of what is known as “management rights”, where the employers have exclusive control. Furthermore, if any savings could be achieved in areas outside the collective agreement, the government would be better off keeping them out of the collective agreement, and thereby retaining all of the savings for themselves, instead of giving a portion back to the unions as sustainability savings compensation.

Furthermore, “one-time” actions would not qualify, because Section 14 requires the measures to be ongoing. In addition, there must be an actual reduction in expenditures, and thus, a “cost” must be attached to any measure, which is not always practical or possible.

There is no reason for a union to negotiate sustainability savings in any area that involves wages or monetary benefits, because each and every dollar of savings is a loss to their members. In the first two years of the agreement, the employees get none of it back. In the third and fourth years, the employees might get some of it back, but only a portion, and only if the Treasury Board approves the increase as well as the agreed to portion, which cannot be guaranteed or predicted.

Thus, Dr. Hebdon concluded that there is no reason for the unions to table their own proposals on sustainability savings, as these would almost always been concessions on their part, and the unions have no bargaining power to obtain concessions from their employer in return.

2. The Government’s Expert – The Other Guy

a) The Other Guy’s Opinion

Justice McKelvey:

The Other Guy’s expertise is in the field of industrial relations. He describes himself as a “social researcher” and did not claim any practical experience at the bargaining table. His testimony focused on the Government’s ability to maintain the same level of public services, with economic constraints and where labour costs continue to rise.

The Other Guy did not agree that monetary issues were always the most significant. He said that each bargaining session is unique, that non-monetary issues are often very important as well, and that it is possible to negotiate agreements with mutual gains that involve trade-offs on non-monetary issues only. He claimed that unions could still strike over non-monetary issues, as this would impose a cost on the employer. The cost might be political more often that not, but this is still leverage.

The Other Guy asserted that it was a mistake to conflate the scope of bargaining (what is on the table) with the strength of bargaining power

(As though these things have no relation to one another. Yeah, you know what I think about that.)

In his view, collective bargaining was still possible, and, because of the sustainability savings provisions, the PSSA set “soft caps” on wages, as opposed to hard wage restraints.

The Other Guy also testified that in his opinion, there were many areas where sustainability savings could be negotiated, and that the need for approval from the Treasury Board shouldn’t have an adverse effect.

(Yeah, he said that all right, but I didn’t hear any good reason to believe it, and it doesn’t appear that he gave Justice McKelvey one either. I’m sure she would have mentioned it if he had.)

In the Other Guys’ opinion, there was no reason to think that there would be a chilling effect on future negotiations, because that only occurs when a government imposes a full collective agreement on the union.

(Uhm, yeah, not buying it. I don’t see any reason why there would only be a chill if they imposed everything, as opposed to practically everything, including the most important things.)

The Other Guy also testified that the relationships between the unions and their employers would not be irreparably harmed, that a soft cap on wages doesn’t intervene in collective bargaining by imposing a settlement (maybe, but that doesn’t mean it doesn’t intervene, or interfere, at all), and that the PSSA doesn’t hinder negotiations, trade-offs, or limit bargaining power.

(Wrong, wrong, OMG so wrong, and all very silly).

b) The Other Guy on Cross-Examination

Oh, I am already starting to giggle. I am so mean.

Justice McKelvey:

The Other Guy’s opinion was challenged significantly on cross-examination, by references to his own writings and tribunal findings.

(Ha, ha, ha, … hoisted on his own petard, and how … ha, ha, ha …)

In the decision of Labourers’ International Union of North America, the Ontario Labour Relations Board said:

In response, Local 1081 filed a response by [the Other Guy]. His report seeks to discredit and undermine the assumptions and data of the O’Grady Report, but fails to come to grips with the primary assumptions contained in the Report. It also includes a great deal of legal and policy analysis that was not part of the O’Grady Report and is more appropriate as counsel’s submissions on behalf of his client rather than an expert (and theoretically independent) opinion.

As a result, the Board found his report to have been of little assistance.

In the Ontario Nurses’ Assn’ case, the tribunal considered testimony from the Other Guy and determined that both his report and his testimony exhibited:

… significant weaknesses in the extent of his review of interest arbitration awards, and his understanding of the principles (replication and comparability in particular) on which they were premised was revealed. We do not therefore accept his conclusions on this point. More importantly, we do not see how those conclusions are at all pertinent to the task before us.

(So, according to these decisions, the Other Guy doesn’t understand the issues, acts as a lawyer instead of a witness, and says stuff that has no relevance to anything.)

As I have said before, the Government of Manitoba should have researched the Other Guy before they retained him so that they could be prepared for this. Based on the reactions I saw at trial, I don’t think they knew how terrible the Other Guys’ testimonial track record was. They should have been ready with other instances where his testimony had been complimented, and if there weren’t any, then they shouldn’t have retained him at all.

Justice McKelvey:

During cross-examination, the Other Guy agreed that union-management relationships were important. A contentious relationship could have a major negative effect on the bargaining process and its outcomes, as well as possibly affect productivity during the term of the agreement.

As the Other Guy himself wrote in a chapter he authored in the book Canadian Labour and Employment Relations:

Governments have also recognized that two of the primary “costs” associated with ineffective and conflictual negotiations include the possible damage to the union-management relationship itself and the potential costs associated with a work stoppage due to a strike or lockout.

In the case of soured union-management relations, the effects may show up during the term of the collective agreement through lower trust and morale, an unwillingness to work together, or a reluctance to facilitate workplace change and innovation — each of which could have negative consequences for productivity.

However, none of these statements or admissions were mentioned in the Other Guy’s reports. He said he had not read any of the affidavit evidence submitted by the Plaintiffs, which outlined and demonstrated the difficulties public sector unions have experienced under the PSSA.

(So, when you are writing your textbook, as an authority, you acknowledge that wage restraint legislation damages the relationship between union and management, but when you are testifying, you say – oh no, no relationship problems at all.)

In another chapter, this one from the book Building More Effective Labour-Management Relationships, the Other Guy wrote:

… the magnitude of labour costs as a proportion of program spending makes compensation restraint an obvious target for government restraint. The difficulty associated with achieving large concessions through collective bargaining creates strong incentives for the government to alter the playing field by introducing restraint legislation.

This option has been exercised over the long term at the federal level, and ad hoc restraint legislation continues to be an option that the federal government exercises in labour relations. The Ontario Government now also has an established track record of resorting to restraint legislation. This pathway impacts the broader industrial relations system and creates pressures on the labour-management relationship.

Resort to restraint legislation erodes the model of free collective bargaining. While there are already considerable limits on collective bargaining in the public sector, the limits have been well-defined and generally accepted by unions and the government as within the bounds of acceptability (e.g., with respect to essential services). Restraint legislation that imposes outcomes or limits strikes, however, undermines a labour relations model that embraces the principle that negotiated contracts are superior.

Restraint legislation therefore serves to weaken the shared ideology that binds the broader industrial relations system by tending to politicize industrial relations — precisely because the government of the day utilizes substantial ad hoc legislation to pursue point-in-time policies irrespective of the established framework within which the parties have agreed to conduct labour relations.

(Translation: Trying to limit wages through bargaining is hard because it means making concessions, so governments are always tempted to just legislate wage restraints. But this erodes the collective bargaining process, and ignores the accepted principle that negotiated contracts are better. It also politicizes labour relations, putting immediate political goals above the existing and ongoing way labour relations have been and are conducted.)

This section of Building More Effective Labour-Management Relationships goes on to say …

At the level of individual labour-management relationships, restraint legislation also frustrates the fundamental interests of labour and management to self-determine the terms and conditions of their individual employment relationship and to negotiate a “reset” on issues that have built up into problems during the term of the contract.

The current model of industrial relations envisages issues that arise during the term of a collective agreement as being resolved through rights arbitration, or carried over into the subsequent round of collective bargaining. Restraint legislation tends to frustrate this process and undermine the agreement to trade off the right to engage in industrial action over major issues during the term of a contract for rights arbitration and the right to strike during the next round of collective bargaining.

The imposition of contract terms therefore also undercuts attempts to build more positive, cooperative labour-management relations.

(Again, imposing wage restraints through legislation hurts the union-management relationship, and this is not good. Note that “frustrating the fundamental interests of workers to determine terms and conditions of their employment” is, by definition, substantial interference as per the test in B.C. Health Services.)

And then,

Justice McKelvey:

The Other Guy tried to explain [all of his contradictory comments in his opinion] away on the basis of the difference between the situation in Ontario and Manitoba, again relying on the so-called soft caps, and that Ontario had brought a series of laws restraining wages.

(Nice try, but none of that matters. Wage restraints weaken collective bargaining, because they pre-determine key monetary terms. And that is so no matter where (in which province) or how many times you use them.)

The Other Guy did, however, admit that if the sustainability savings provisions did not work, the PSSA would be flawed, and its wage restraints would be considered hard caps.

In an article entitled “From Non-Union Consultation to Bargaining in the Canadian Federal Public Sector” (from the book Voice and Involvement: Experience with Non-Union Representation, 1st Edition, 2014), the Other Guy wrote:

During the period since unionization and collective bargaining was introduced in 1967, successive governments continued to engage in tactics such as wage freezes, back-to-work orders, or suspension of interest arbitration, which have been characterized as “government unilateralism“, and which in any event have served, by definition, to circumvent and weaken the collective bargaining process and framework.

(By DEFINITION, the Other Guy’s own words, wage freezes interfere with collective bargaining. Whether they substantially interferes according to the legal test set out by the Supreme Court in B.C. Health Services is another matter, a matter of law for the courts, not experts, but sheesh.)

The Other Guy looked only at the PSSA and its terms (and none of the context). He claimed collective bargaining is still allowed, there are trade-offs to be made, and that he knew of no research that suggested that relative bargaining power is affected.

(Of course that doesn’t mean that research doesn’t exist, and besides, to the vast majority of people with bargaining experience, it is pretty much accepted as a given that bargaining power is significantly affected by what is on the table.)

Yep. So, that was about it. During trial, the Other Guy gave a whole bunch of reasons why the PSSA wouldn’t affect collective bargaining and wouldn’t change the relative bargaining power between unions and employers. But, when he is writing as an independent academic as opposed to testifying, and not apparently acting as someone’s “opinion-for-hire” pawn, he pretty much holds the opposite opinion on each and every one.

C. SUBSTANTIAL INTERFERENCE – JUSTICE mCKELVEY DECIDES

And here it is. The main event. Considering the evidence – from the unions and the experts – we finally get to the fundamental question:

Does the Public Services Sustainability Act substantially interfere with collective bargaining in Manitoba?

1. Substantial Interference – The B.C. Health Services Test

Justice McKelvey:

Section 2(d) of the Charter protects the Freedom of Association. The Supreme Court of Canada has made a number of decisions relating to this freedom. As Justice Abella said in SFL: “the arc bends increasingly towards workplace justice” (paragraph 1).

This arc began with Chief Justice Brian Dickson’s dissent in the Alberta Reference, and that dissent formed much of the basis for the Supreme Court of Canada’s decision in B.C. Health Services.

The test for substantial interference in collective bargaining as set out in B.C. Health Services involves two inquiries:

The first inquiry is into 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. The more important the matter, the more likely that there is substantial interference.

The second inquiry is into the manner in which the measure impacts on the collective right to good faith negotiation and consultation.

This application of that test is a contextual and fact-based analysis of whether the PSSA, in intent and/or effect, substantially interferes with collective bargaining. The intensity of the measures must be evaluated, as it is the intensity of the measures that matters.

So far so good.

2. The Test Part 1: The Importance of the Measures

Justice McKelvey:

Issues such as wages, monetary benefits, contracting out, ability to strike, pensions, layoff conditions, bumping rights, and seniority, have all been regarded as being of fundamental importance to the collective bargaining process.

As Chief Justice McLachlin said in the MPAO case (quoting Justice Cory in the Alberta Reference):

Whenever people labour to earn their daily bread, the right to associate will be of tremendous significance. Wages and working conditions will always be of vital importance to an employee.

The PSSA has effectively removed wages and all monetary benefits from collective bargaining in the public sector in the Province. Through the PSSA and mandates, the Government of Manitoba has made it clear to public sector employers that there can be little or no bargaining on these matters. Both sides in this case agree that wages and monetary benefits are of fundamental importance to the bargaining process, and the trial evidence, including the expert evidence of Dr. Hebdon supports this.

Therefore, after a careful consideration of all of the evidence, I am satisfied that the first step of the substantial interference test has been met.

Wages and all monetary issues. Are these matters that are important to the unions, and to the process? You betcha.

3. The Test Part 2: Impact of the Measures on Collective Bargaining

Justice McKelvey:

It is true that collective bargaining can transpire under the PSSA, but the meaningfulness of that process and ability of union members to come together and pursue collective goals has been substantially impacted.

Any gains the unions have made in the agreements made under the PSSA, have been minimal. The unions in Red River College and Assiniboine College agreements were worse off, losing layoff protection that they would have otherwise been able to bargain for. Although some of the unions have issued positive bulletins discussing the agreements, they were only trying to alleviate some of their members’ frustrations and embarrassment. As Miranda Lawrence described it in her testimony, her union (the MGEU in the GOLICO negotiations) was just trying to address the cynicism and frustration that had arisen.

Although actual outcomes are not determinative of whether there has been substantial interference in the collective bargaining process, the nature of the outcomes can illustrate how and how much the process has been affected.

In B.C. Health Services, the Supreme Court described meaningful collective bargaining as including:

♦    A duty to engage in meaningful dialogue, with a willingness to exchange and explain positions.

♦    An obligation to participate in good faith discussions.

♦    Approaching the bargaining table with good intentions.

♦    Hard bargaining may occur, but should not be adopted with the intention of avoiding an agreement or destroying the relationship.

♦    What has happened before is relevant.

♦    Even a temporary interference with the process can be substantial.

According to the MPAO decision, the balance of power between an employer and employee can be disrupted by restricting the subjects that can be discussed and imposing arbitrary outcomes.

Ok, can we stop now? Check, check, check, check. The PSSA meets or violates every one of these principles. Oh, no. Not yet. Because the Government brought it up, we have to deal with Meredith.

4. The Meredith Decision (My Most Hated Helping of Higher Law)

Justice McKelvey:

The constitutionality of the Expenditure Restraint Act (the ERA) was upheld in a number of decisions by the Supreme Court of Canada and Appeal Courts in the country. The Government of Manitoba argued that because there are important similarities between the ERA and the PSSA, the PSSA should also be found to be constitutional. These include:

    1. Both set limits on wages for a specific, short period of time.
    2. Both eliminated any possibility of any other additional monetary benefits.
    3. Both applied to the whole public sector, unionized and non-unionized.
    4. The wage levels set in the ERA were the same as wages negotiated prior to the ERA being enacted, thus the ERA used wage limits that were consistent with the “going rate”. The government claims that since the 21 agreements that have been reached since the PSSA was enacted are consistent with the PSSA, the PSSA pattern sets out the “going rate”. This is disputed(No kidding.)
    5. Both still left non-monetary issues open for collective bargaining
    6. Both left eligibility for merit and years of services untouched.
    7. The right to strike remained in both.

    The Government of Manitoba also submitted that the PSSA was in fact better that the ERA because:

    1. The ERA overturned some existing agreements; the PSSA did not.

    2. The PSSA has sustainability savings provisions that might increase wages; the ERA did not.

    3. The exemption clauses in the PSSA are broader, and therefore better, than the ones in the ERA.

    The unions contend that the conclusion in Meredith should be confined to the limited Pay Council process at issue in that case, and therefore does not apply broadly because the Pay Council process was not true collective bargaining. Furthermore, unlike the PSSA, the wages limits in the ERA were consistent with the “going rate” in the rest of the public service, and the ERA didn’t prevent other monetary benefits from being included.

    The unions also argue that the 21 agreements that have been reached since the PSSA are enacted are not the result of an actual collective bargaining process. And finally, the fact that agreements obtained by unions outside the PSSA’s reach have much better wage provisions demonstrates that the PSSA does not represent the “going rate”.

    There were other important differences between the PSSA and the ERA. The PSSA sustainability period floats in time to the expiration of an existing collective agreement, and thus would cover agreements as far into the future as 2025, eight years after it was enacted. The first two years of the PSSA pattern were wage freezes, 0% increase, whereas the ERA had some small wage increases in each year that it applied to. The Quebec Court of Appeal in Syndicat Canadian (CBC Case) said that if there had been zeros, the ERA would have been much more draconian.

    I have to admit that in the next part of the decision, I couldn’t tell whether Justice McKelvey was still talking about what the unions or the government are arguing, or whether it is her own opinion. I think it’s hers.

    In any event, she seems to accept that:

    1. The ERA followed the going rate set by collective bargaining that took place before the ERA was enacted.
    2. The collective bargaining that took place was found to have been meaningful, i.e. the court determined as a matter of fact that the agreements that were reached were true collective bargaining. (I take this to mean that, even though everyone knew the ERA was coming, the collective bargaining that took place before the ERA was still “free” enough to qualify as meaningful.    
    3. In contrast, the agreements reached under the PSSA weren’t made until after the PSSA was passed, and those agreements were affected by the retroactivity/claw back provisions, and were made under protest.
    4. Therefore, although meaningful collective bargaining took place before the ERA came into effect, the same cannot be said of the PSSA.

    5. Meaningful Bargaining with the Leftovers is Not Possible (and the Sustainability Savings Sections are Bull Crap)

    Justice McKelvey:

    I am not satisfied that the PSSA allows for meaningful collective bargaining on important non-monetary issues. As Dr. Hebdon testified, most strikes (77%) relate to wage issues, and wages and monetary issues are generally a top priority for unions. Although there can be non-monetary workplace and job security issues, the unions don’t have the leverage that ability to negotiate monetary terms would give them. This makes any agreement on non-monetary issues unlikely. While the right to strike remains, Dr. Hebdon testified and I accept that under the PSSA, the right to strike is futile, because, as demonstrated by the evidence given in this trial, union members have no appetite for striking over non-monetary issues.

    Although merit and step increases continue under the PSSA, there is no evidence as to how many employees would obtain these increases, and such benefits are limited over the course of time in any event.

    Even though the PSSA doesn’t rollback existing agreements, it would erase any gains in agreements retroactively once it is proclaimed.

    The expert evidence on the sustainability provisions leads to the conclusion that these have no value. No one has negotiated sustainability savings since the PSSA was passed in 2017, probably because they would come at a cost to the union.

    It is likely that the sustainability provisions were included to provide a defence to a constitutional challenge by affording an avenue for collective bargaining on wages, whether realistically achievable or not.

    Ha, ha, ha, ha … Justice McKelvey likes to use the super-passive passive tense when she is dumping on the government. I think she really means – the sustainability savings were just some B.S. that the government threw in so that they could pretend that they were leaving some room for collective bargaining, even though they knew it would never work.

    Since this seems to be what the Government of Nova Scotia was doing too, I hope they’re taking notes.

    Oh-oh. Now she starts comparing the experts …

    6. Considering the Collective Bargaining Experts

    Justice McKelvey:

    While the evidence of Dr. Hebdon and the Other Guy agreed on certain aspects of their testimony, there were areas of significant divergence. I am satisfied and accept the evidence of Dr. Hebdon as being more reasonable and persuasive in the circumstances. The Other Guy exhibited definite biases that were well brought out in cross-examination.

    (Well done, Shannon.)

    Furthermore, Dr. Hebdon has had practical experience at the bargaining table. The Other Guy doesn’t have any. Although the Other Guy was correct that non-monetary issues can be important, Dr. Hebdon testified that monetary issues are generally more significant, and the trial evidence supports this conclusion. Finally, although the Other Guy was of the view that sustainability savings could be negotiated in the third and fourth years, it is noteworthy that he didn’t review any of the affidavits from the unions that discussed how the “negotiations” under the PSSA actually went.

    (OMG. I think she just said that the Other Guy doesn’t know what he is talking about, especially since he didn’t even bother to read the evidence.)

    The Other Guy’s own writings demonstrated the significantly negative effects of wage restraint legislation. Although he claimed that the damage he referred to were limited to Ontario or federal legislation, it is disingenuous to suggest that the ramifications of wage restraint legislation would not have the same effect on public sector workers in this Province.

    (In other words, since your distinctions make no difference, it’s kind of a facetious try.)

    I am satisfied that the evidence of Dr. Hebdon must be preferred and it was particularly important in evaluating the constitutionality of the PSSA. He utilized a fact-based and contextual analysis in reaching his conclusions, and he had taken the opportunity to review all of the evidence.

    (Oh man, is she ever mad about the Other Guy not even bothering to read the evidence. Although, if I’d been Leonoff and Ladyka, I would have kept it away from him too. Everything in the unions’ testimony thoroughly contradicted everything the Government of Manitoba wanted the Other Guy to say.

    Of course, they could have chosen not to bother with the Other Guy’s now very embarrassing assertions, but that would have required the Government of Manitoba to give up on that particular game.)

    7. The Effects of Removing Wages and All Other Monetary Benefits

    Justice McKelvey:

    All parties agree that wages and monetary benefits are usually high priorities for the unions. These issues are usually dealt with last, to allow for momentum to build through bargaining on non-monetary matters.

    Furthermore, where monetary wages and benefits have been imposed, it is less likely to get agreement on significant non-monetary issues, such as job security, because leverage is lost, and the union’s bargaining power is diminished.

    I accept Dr. Hebdon’s conclusions that:

    Given that wages and other monetary terms have been excluded from collective bargaining for four years, my conclusion is that meaningful collective bargaining is not viable …

    … the PSSA unfairly places restrictions only on the union’s side. The four-year so-called sustainability period ‘pay rate’ increases of 0, 0, .75, and 1% clearly favour management. This aspect of the PSSA unfairly shifts the balance of bargaining power in favour of management interests.

    … monetary issues are pivotal to the exercise of bargaining power of both labour and management. The parties know that when monetary issues are settled, it is almost impossible to generate pressure on any other issues because they are central to the negotiations. Thus, by predetermining pay rate increases in favour of management the union is left with almost no ability to exercise bargaining power on non-monetary issues.

    Wage restraint legislation also causes damage in other areas. Union members can no longer have their priorities addressed. This creates cynicism and frustration, which is directed at both union leadership and management generally. The testimony of the union representatives demonstrated that such frustrations exist in Manitoba’s public sector (as a result of the PSSA, of course).

    Dr. Hebdon’s opinion that such legislation causes more grievances and industrial conflict was supported by literature and experience. A chilling effect on subsequent rounds of collective bargaining is also expected to occur, although the evidence before me was not as strong in that area.

    In 2010 and 2011, Manitoba’s public sector unions bargained for 0% wage increases in return for non-monetary benefits such as job security. In today’s circumstances, the unions have lost the leverage from monetary matters and are thus left with very little power to negotiate on non-monetary issues. Although there have been some improvements – BUFA’s four new faculty members, for example – these gains were small in comparison to what, arguably, could have been negotiated through collective bargaining with all issues on the table.

    (Yep. True. And pretty much obvious and predictable to anyone who has ever participated in collective bargaining and similar negotiations.)

    Negotiations with Red River College and Assiniboine College demonstrate this problem. In the past, their unions had negotiated 0% wage increases in exchange for better job security protection. In the latest round of bargaining, the PSSA wage pattern was accepted, but, not only were the unions unable to obtain provisions for better job security, existing job security provisions were eradicated.

    Without question, this damages the collective bargaining process, caused frustration within the union membership, and constituted a substantial interference.

    (Oh-oh. Get out the checkbook Brian. You’re done. Oh wait. That’s OUR money. And that’s why we are all entitled to ask you – what the [bleep] are you doing?)

    This is not going well at all for the Government of Manitoba, although, IMHO, it is all well-deserved. Makes me wonder a little at the political strategizing. Yeah, I get that due to the turtle-ing slow motion of the legal system, you have some space for short-term play. But, you know, that’s not really an acceptable defence for deliberately doing something that you know is illegal, and besides, turtled-pace or not, at some point the court-appointed piper has to be paid.

    Anyway, Justice McKelvey’s getting really mad here … substantial interference it is …

    Justice McKelvey:

    I accept Dr. Hebdon’s conclusion that “with monetary issues already predetermined, meaningful bargaining is unworkable and almost impossible.” This constitutes substantial interference.

    It is disingenuous (you mean devious, dishonest, deliberately duplicitous) for the Government to argue that it is operating by policy and mandate on monetary issues and not by virtue of the legislation. The PSSA is the enactment of those policies, and even though it has not been proclaimed, the Government is instructing public sector employers to comply with the PSSA’s provisions. Tough mandates can be adopted, but in the process of setting them according to and under the PSSA, the Government of Manitoba has substantially interfered with collective bargaining in the Province.

    The threat of retroactive claw back looms over any employer or employee that dares to bargain outside of the PSSA parameters, which encourages (essentially forces) everyone to comply with the PSSA, since the Act could be proclaimed at any time.

    (All right then. So all that nonsense about ‘oh, we’re not applying the PSSA already, nothing like it, we’re just setting mandates’? Sorry shilly-shallying shysters, nobody is buying it.)

    The Government of Manitoba indicated through Rick Stevenson that it chose to legislate wages through the PSSA, despite having negotiated public sector wage pauses in the past, because they wanted certainty. If public sector employers had to bargain for the pauses, it is likely that they would have to agree to better job security – such as no layoffs, no contracting out, etc. – and other measures in exchange. This hypothetical result would recognize trade-offs inherent in the collective bargaining process.

    At this juncture, the government has sought wage restraint without having to make any concessions. IT IS A STRIDENT, INFLEXIBLE, AND RIGID APPROACH TO LABOUR NEGOTIATIONS.

    (Take that, Government of Manitoba. You deserve it.)

    I am satisfied that the Government of Manitoba could have achieved fiscal restraint through collective bargaining. It would have been necessary to provide the kind of additional information Kevin Rebeck asked for to allow the unions to understand the issues so that the parties could engage in mutually meaningful bargaining. This could have been achieved, while protecting Cabinet Confidentiality as regards certain information at the same time.

    (Grow up. Give them the information and then let everyone get down to bargaining.)

    I accept Dr. Hebdon’s findings that the sustainability savings provisions are unworkable. They have not been utilized to date, and I accept Dr. Hebdon’s conclusion that these provisions are unlikely to result in enhanced employee compensation. The Treasury Board has the sole discretion to approve any uses of sustainability savings, and, although it is possible for a collective agreement to make provisions contingent on Treasury Board approval, that has not occurred.

    Furthermore, it makes no sense for the unions to agree to sustainability savings arising from reduction in their monetary benefits, because although they could get 50% of it back if approved by the Treasury Board, the other 50% is effectively lost to the Government. And, as per the testimony of Sheila Gordon, the Government of Manitoba’s proposals to the MGEU on achieving sustainability savings through things like reducing overtime rates from double time and a half, reducing retirement allowances and severance pay; lowering wage and salary rates for some classifications; and, reducing retroactive salary payments, would all amount to concessions to be made by the MGEU without any benefit in exchange to encourage them to agree to it.

    Well, that’s pretty clear. You cannot have real collective bargaining under the PSSA because the unions have lost most of their bargaining power and so have nothing to bargain with. Suggesting that this is just mandates and policy and not applying the PSSA is dumb and deceitful. Your thirst for certainty has made sure that collective bargaining in the Province of Manitoba will be certainly destroyed. And those stupid sustainability savings provisions aren’t going to do anything except make you look bad.

    Let that be a reminder to all politicians: communications strategies are way more liability than advantage when you get into a courtroom. That’s because anyone can spin anything any way they want to in public relations, but the legal system requires that if you want to say anything, you have to the evidence to prove it.

    And, oh, by the way, when you get to court, you have an opponent who’s job it is to make you look foolish as possible when you can’t. Don’t be a Dumbo. Don’t give them so much ammo.

    Ok, Justice McKelvey has a final note on International Law before she gets to the ultimate conclusion on substantial interference …

    8. International Law

    Justice McKelvey:

    International law has played a role in Charter interpretation in Canada and has been relied upon many times, including in labour relations cases, such as B.C. Health Services, Meredith , and the Alberta Reference. However, this does not necessarily reflect an adherence to International Law nor does a violation of International Law equate to a violation of Canadian law.

    I agree with the Government of Manitoba that Canadian law must be considered separately and differently from International Law. Where International Law has had different principles and expectations, any violation of that International Law is of no assistance in determining whether Canadian law has been violated. Even where the Supreme Court of Canada has criticized measure for not adhering to International Law standards, that criticism does not necessarily result in a violation of Canadian standards.

    I am satisfied, however, that International Law provides an important interpretive tool, although International Law cannot create a Charter protection, nor does it necessarily “bolster” a perceived violation

    In short – International Law isn’t binding (yeah, and I’m certain Labour’s lawyers never said it was), but it can be an effective, important, and useful interpretive tool, and the Supreme Court of Canada has used it as such many times in the past.

    Ok, finally, the big biggie issue is about to come to its close. Is the Public Services Sustainability Act unconstitutional under Section 2(d) of the Charter, because it substantially interferes with collective bargaining? Let’s take a look …

    9. In Conclusion …

    This is six pages of a vigorous public thrashing, the kind of thing you aren’t likely to read in the newspapers. It’s not their fault. Court cases don’t lend themselves kindly to that forum. Unlike this one …

    You can read the original here (pages 177-183), or follow along … here are the highlights …

    Justice McKelvey:

    I am satisfied that the PSSA violates Section 2(d) of the Charter based on the facts of this case. The legislation prevents meaningful collective bargaining on monetary issues, an area central to freedom of association and the capacity of the association to achieve a very significant common goal. The overall impact of the legislation on collective bargaining rises to the level of substantial interference. The PSSA is distinguishable from the ERA due to the many differences between them and the very different financial circumstances surrounding the act.

    The PSSA is a DRACONIAN measure which limits and reduces a union’s bargaining power. It circumvents and compresses the union’s leverage and inhibits the union’s ability to trade off monetary benefits for non-monetary enhancements, such as job security.

    The PSSA has left no room for meaningful collective bargaining on issues of crucial importance to union members. Because members’ priorities cannot be promoted to the bargaining table and considered in good faith, the right to meaningfully associate to pursue fundamental and important workplace goals has been denied. It is not the “fruits” that raises the substantial interference; it is the loss of a meaningful process.

    (Remember that according to B.C. Health Services, outcomes aren’t protected, only the process by which you get there. Thus, you aren’t entitled to a particular wage increase, or protected from having no wage freezes. But what you are entitled to, is to be able to ask for, and bargain for those kinds of outcomes in a process of meaningful negotiation.)

    The minor improvements achieved through collective bargaining in the 21 agreements negotiated under the auspices of the PSSA reflect the minor degree of bargaining power. Where wages are the top priority for union members, the PSSA negates and diminishes a union’s ability to participate in collective bargaining. With monetary matters excluded from bargaining, it is impossible to have robust bargaining on non-monetary matters either.

    Substantial interference doesn’t require total interference, so the fact that some bargaining and some improvements has occurred doesn’t shield the PSSA from this constitutional challenge.

    (The whole point of the Other Guy’s testimony was basically– it’s not substantial interference if you can still bargain with what’s left over. Not true. It’s still substantial interference if those leftovers are turds.)

    The PSSA’s wage restraints are particularly concerning given the fact that 0% wage increases were negotiated in 2010 with almost all of the public sector. There were trade-offs, and not the certainty that this government desires. It is those trade-offs that this government wants to avoid by legislating its mandates and policies through the PSSA.

    (Here we go again – the inescapable conundrum. If you legislate to avoid trade-offs, and to get the certainty that you won’t have to give up anything in trade, then you can’t try to pretend that you aren’t substantially interfering in collective bargaining, because what you are really saying is I don’t want to have to bargain at all, at least not on the important stuff, like wages.)

    The 21 agreements that were PSSA-compliant were conditionally ratified (an unusual process), negotiated under duress, and under the threat of the retroactive claw back provisions. This does not constitute fair and meaningful collective bargaining (no kidding) nor does it cure unconstitutional substantial interference.

    Some collective agreements, like the Westman Labs agreement, were allowed to include amounts higher than the PSSA limitations, but those were to provide equity in the healthcare field while restructuring was occurring, and those members would still be subject to the PSSA period in the future. Furthermore, some of those were achieved with a “take it or leave it” approach, which is not collective bargaining.

    (I don’t think I explained this before. Bill 29, the bill after the PSSA, forced a huge restructuring of unions in the health care sector in Manitoba. The Government of Manitoba said that they wanted to reduce the number of unions that they had to deal with.

    Like so much of what the Pallister Government has done in the labour context, it doesn’t make that much sense. Although I suppose there might have been some inefficiencies from having a lot of littler unions, there doesn’t seem to have been much proof that this caused huge problems or lots of additional expenses. Thus, it just seemed like a way to make life difficult for the unions – pitting them against each other to obtain and retain members, creating unnecessary conflict and disunity. It certainly created a huge mess.

    Sounds like a good way to go about doing nothing but busting unions to me.)

    Just because the unions can still negotiate non-monetary issues, that doesn’t make collective bargaining meaningful. Union representatives must be able to pursue its member’s priorities, which primarily involve monetary gains. Once monetary issues are removed from the bargaining table, collective bargaining has, in these circumstances, experienced substantial interference. This is particularly so when wages are frozen for two years, as demonstrated in the Correctional Officers decision (The Attorney General of Canada v. the Union of Canadian Correctional Officers 2019 QCCA 979). In that case, removing staffing and pensions breached the Charter right to freedom of association, even though all other issues could still be negotiated. (That legislation was, however, saved by Section 1 of the Charter).

    I was a little concerned at this point in the judgement. The way it reads, Justice McKelvey can be taken to be saying that once you take out wages, you are done – wage restraints, especially freezes, will almost always automatically result in substantial interference in collective bargaining. People in legal circles will recognize that suggesting that, as a fixed rule of law, removing wages = substantial interference is something that will almost automatically give grounds for appeal.

    Granted, Justice McKelvey doesn’t actually say that, qualifying it with “in the context”, but since she isn’t all that clear about what aspects of the context she is including in that comment, it could be as broad as just you know, the context of any collective bargaining. Governments would hate this, because it would be essentially saying – you can never put in wage restraints ever, because it is unconstitutional, and if you are even thinking of trying it, you had better have a very good economic basis to support a Section 1 defence, because you are going to need it.

    Personally, and practically, I wouldn’t be at all bothered by such a result. The reality is that wages are fundamentally important to unions. It was starvation wages that led to the formation of unions in the first place, and the collective power to get fair play on employee pay is what makes unions the most attractive to members.

    Furthermore, I have very little sympathy for governments in this regard. I’m not against reducing taxes where it makes sense, but I’m with Dr. Hebdon on this point – reducing taxes by cutting the wages of workers in the public sector is a lazy way to go about it. Probably the laziest way I’ve seen.

    Can you imagine this in the private sector? Some middle-manager says, hey people, I’ve got a great idea on how to meet my budget this year, I am going to cut, cap, freeze all of my employees’ wages. Tee-hee. Look. Me so smart.

    I mean, sure, that’s a way to make the numbers work out, but I doubt very much that it would fly as an appropriate management strategy. Again, this makes me question politicians who suggest that they are bringing the wisdom of business to the business of government. As I’m sure you’ve noticed, I’m pretty skeptical about such claims anyway, but this sure doesn’t look like good business strategy to me.

    In any event, while this broad interpretation may be twisted into a ground of appeal (I’ll let you know whether it is once I see the Notice of Appeal), it is likely to get dealt with by the upper courts in this sort of way:

    A law isn’t automatically unconstitutional simply because it removes wages from collective bargaining.

    Everything is contextual, and it depends on the surrounding facts (the specific bargaining situation) as to whether the exclusion of wages from collective bargaining amounts to substantial interference in each case.

    Justice McKelvey did not find that the removal of wages alone caused substantial interference and it is clear that her conclusion of substantial interference was based on all contextual factors in the case. Therefore, Justice McKelvey’s decision is upheld.

    This would clarify the law on this point, but Labour still wins.

    The lawyerly mind might suggest that Justice McKelvey could have worded this differently, and tried harder to make her decision appeal-proof. But I’d say no. Because the substantial interference test is still being worked out, there is always going to be room for quibbling on clarity. Besides, no matter what Justice McKelvey did, the Pallister Government was going to appeal it anyway. It’s not like they’ve ever let not having a legal leg to stand on stop them.

    Back to Joan …

    Justice McKelvey:

    The ERA cases can be distinguished because good faith bargaining had transpired, capped wage increases were allowed in each year (as opposed to out-and-out freezes), and the 2008 global financial crisis was a unique situation.

    (Yay Shannon. She essentially quoted and cribbed you.)

    The PSSA has reduced the unions’ bargaining power, causing all the negative consequences outlined in Dr. Hebdon’s evidence. The government’s position on wages and other monetary benefits has been substantially inflexible and intransigent since 2017. It’s actions have narrowed the range of collective bargaining so much so that some units have had to merely capitulate. Where exceptions have been made, such as with Doctors Manitoba, the government has applied the legislation in an unequal manner.

    (Ooooh, take that – smack, smack, smack.)

    Time for the big conclusion, albeit by this point a foregone one …

    Justice McKelvey:

    I accept that the Province had fiscal concerns. I have evaluated those concerns and remain satisfied that the PSSA has compromised and substantially interfered with collective bargaining in Manitoba for all the reasons previously articulated.

    These include:

    1. The PSSA has caused a significant reduction in the unions’ bargaining power, preventing discussions and pursuit of meaningful workplace goals (see UMFA, RCC, ACC and UCN as examples).
    2. The PSSA removes the ability to conduct genuine collective bargaining on monetary issues.
    3. Wage freeze have been collectively bargained successfully in the last 10 years.
    4. Removing monetary issues from the bargaining table has caused disruption.
    5. Strikes have become futile.
    6. Capitulation rather than negotiation has occurred. (Go Garth, she agrees with you.)
    7. The ERA cases are distinguishable because:
      1. Collective bargaining prior to its enactment was recognized and incorporated into the legislated caps.
      2. The unions were advised of the nature and content of the ERA which allowed them to meaningfully collectively bargain in advance of implementation, with full knowledge as to what would soon transpire. (Unlike the shystery nonsense the government tried with the Fiscal Working Group. Blah.)
      3. The ERA was enacted in response to a global financial crisis.
      4. The ERA did not include a “draconian” wage freeze (Syndicat canadien, para. 48);
    8. The Government
      1. Had not endeavoured to collectively bargain wage restraint within the public sector prior to the PSSA‘s enactment. (So they cannot claim that their PSSA pattern reflected the going-rate in the public sector.)
      2. Agreements bargained by entities not captured by the PSSA, such as Revera and Arlingtonhaus, were well above the caps set under the PSSA. (Again, shows not even close to the going-rate.)
      3. While actual outcomes are not determinative of a s. 2(d) analysis, the evidence of outcomes for bargaining units, such as Revera and Arlingtonhaus supports the conclusion of substantial interference and the major impact that has been occasioned upon associational activity. (The contrast between what happens with the PSSA versus what happens without shows how much of an effect the PSSA has on collective bargaining.)
    9. The government has bargained with certain groups beyond PSSA parameters with time-limited offers; two were “papered” and backdated to appear that they were signed before the PSSA, which was not the case; stipulations that the PSSA would apply to the next agreement; others were not permitted to engage in such negotiations. (The only consistent thing about the way the government has been applying the PSSA is that it has been inconsistent, unfair, and cheesy – a deal for you, but not for you, and if you don’t like it, no soup for you.)
    10. The damage to relationships between unions and the Government or the employer.
    11. The damage to relationships between the unions and their memberships — DSM Westman Labs, MGEU, UMFA, EMS, Superintendents, MTS, etc.
    12. The questionable viability/utilization of negotiated sustainability savings in years three and four of the PSSA.
    13. The conditional ratification of agreements signed under duress.
    14. The unions’ evidence that only minor gains were achieved in those conditionally ratified agreements.
    15. The claw back provisions.
    16. The creation of uncertainty, delay and confusion.

    Ok, there we have it. Substantial reasons to support the conclusion that there has been substantial interference. And, sections 9-15 are therefore declared to invalid and of no force or effect. Bye-Bye PSSA entirely, because without those sections, there is no act, at least as it affects public sector employees. Yeehaw.

    Oh, but wait. We’re not finished yet. Yes, the PSSA is unconstitutional, but we still need to consider the Government of Manitoba’s Section 1 defence. If you recall, I didn’t think they had one. But of course, that’s Justice McKelvey’s call.

    • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

    Yes, I know. The Section 1 defence fails too. Let’s look at why …

    V. Can Section 1 of the Charter save the PSSA? →

    The Trial Begins

    Setting the scene in Courtroom #210 as the trial of MFL v. Manitoba begins. We get some background and meet the players.

    Opening Statements

    The proceedings begin with opening statements. Here, the lawyers for each side give us an outline of the course they are going to take (and why it is going to take 13 days to get there).

    The Testimony of Kevin Rebeck

    The President of the Manitoba Federation of Labour testifies about consultations between the government and some Labour leaders prior to the PSSA being passed. They weren’t very fruitful, and there seems to have been some question as to whether the government was being truthful.

    Passed but Not Proclaimed?

    Why is the government waiting to proclaim the PSSA? I thought there was a financial emergency, and dire warnings of our precarious fiscal position. But it has been 2 1/2 years. Don’t they need it yet?

    The Testimony of Elizabeth Carlyle

    Elizabeth Carlyle gets cross-examined about what happened in a negotiation between CUPE and the Winnipeg School Division. It wasn’t a lot, and it doesn’t sound as though it was very good.

    The Testimony of Dr. Mark Hudson

    Remember when the faculty at the University of Manitoba when on strike in November of 2016? Dr. Mark Hudson is here to tell us why it happened. And he fills us in on what was happening between the University and the Province behind the scenes.

    The Testimony of Tom Paci

    Tom Paci appears on behalf of the Manitoba Teachers Society. His story? A quest for justice for Manitoba’s 15,000 teachers and an appeal to the gods of justice – how can we be bound by the PSSA when it is not law?

    Indirect Taxing & Discriminatory Taxation

    If a tax by any other name would be as taxing, could wage freezes be indirect taxation? And if members of public sector unions are paying more in taxes to support public services, would this qualify as discriminatory taxation?

    The Testimony of Michelle Gawronsky

    The leader of the Manitoba Government and General Employees Union recounts her experiences since the advent of the PSSA. Everything she says about her automatic approach to understanding concerns and finding ways to solve problems makes me think ” leader, leader, this is a great leader.”

    The Super Six Speak

    Six experienced union negotiators come to tell us about what has been happening in their collective bargaining worlds. We learn more about what the PSSA means for public sector unions and their collective agreements.

    Labour’s Collective Bargaining Expert

    Dr. Robert Hebdon testifies about the impact of the PSSA on collective bargaining in Manitoba’s public sector. It isn’t good.

    The Testimony of Sheila Gordon

    We end the union tales of collective bargaining under the PSSA in passed-but-not-proclaimed limbo with MGEU’s GEMA. Sheila Gordon, MGEU’s senior negotiator was there. And she is here to tell us how those negotiations did not go anywhere.

    Labour’s Read-ins and One Last Reveal

    You never know what read-ins from discovery might reveal.

    The Testimony of Richard Groen

    Richard Groen, an Assistant Deputy Minister from the Ministry of Finance, testifies about the Province’s budgets and such.

    I was expecting him to demonstrate what all the financial fuss in 2017 was about, you know, why our financial ship was sinking so much that we needed all hands on deck. But …

    A No-Compete Treat for the Labour Market?

    I don’t understand why the government doesn’t think it should have to compete in its own labour market. It does everywhere else.

    The Testimony of Garry Steski

    Is it wrong to admit that before this I didn’t really know what a bond market was? Well, I do now, and we learn a little about how Manitoba’s bonds were affected by the fiscal challenges in 2016. Or not.

    Bean Counters, Businessmen & Business of Government

    If businessmen go into government to bring the principles of good business to government, then shouldn’t they act like good businessmen when they get there?

    The Government’s Collective Bargaining Expert

    It is best to talk about what happened here as little as possible. So we’ll talk a bit about the importance of turkey instead.

    The Testimony of Aurel Tess

    How a short day of seemingly tedious technical testimony on Manitoba’s Summary Financial Statements turned into a most unpleasant surprise.

    Politicizing the Provincial Comptroller

    Ok, Manitoba. Politicizing the Office of the Provincial Comptroller?

    That takes the poop-cake.

    The Government’s Economics Expert

    The government’s economics expert, Dr. Livio Di Matteo, has a motto he lives by: Agimus Meliora – Let us do better.

    It makes me wonder, Manitoba, can’t we do better than the PSSA?

    Labour’s Economics Expert

    Dr. Eugene “the Earnest” Beaulieu testifies that the PSSA is not only not necessary, it is a harsh measure that puts an unfair burden on public employees.

    Bye Bye, Dumbo

    Let’s take one last look at the Elephant in the Room, and then say goodbye.

    The Mandamus Application

    A day of argument about whether a statute that says “the Minister SHALL FORTHWITH” means that the Minister can decide not to do something and make up his own reasons for why he shouldn’t.

    Decision on the Mandamus Application

    Justice Keyser, the judge on the Mandamus Application, has spoken. Here’s a hint – MGEU wins.

    Bill 9: We’re Gaming Again …

    Before we begin all the good stuff, Garth Smorang has some objections to yet another litigation game the Government of Manitoba is playing.

    Labour’s Final Argument

    Labour’s last stand. Shannon-the-Hammer and Smorang-the-Smasher pull it all together and wrap it all up.

    There is an awful lot of it, so Labour’s final arguments have been separated into four separate posts, which start here …

    Butt-First Buffoonery

    How did the Government of Manitoba get to such an embarrassing PSSA place? They backed into it.

    The Government’s Final Argument

    Forget the Elephant-in-the-Room.The Government of Manitoba has got many other ways to try to move the goalposts, as they try to change the game.

    Kind of seems like they know they are losing.

    Labour Replies

    The Finale of the Finale. Labour replies.

    (This means we are finally done. At least with the evidence and arguments.)

    The Onion of Outrage

    Why am I here? Why spend so much watching lawyers and judges and reading endless cases? It’s a pretty simple answer.

    I was mad.

    The Decision is In!!!

    The Honourable Justice Joan McKelvey has ruled. Labour won. The PSSA is unconstitutional.

    This is what she decided and why.

    What Have We Learned?

    There’s lots to discover from considering Justice McKelvey’s decision, and not just for labour lawyers. Let’s take a look at what we have learned.