It feels somewhat anti-climactic now. Once you know who wins, does anyone care about the game? (In case you missed it – Labour won.) But when comes to court decisions, there is always much utility in examining how Justice McKelvey got there.

You see, this isn’t just another court case, it’s a Charter case, and Justice McKelvey’s decision is full of directions to the Government of Manitoba and other governments across Canada, about what to do and, please listen people, what not to do.

It remains to be seen whether the Pallister Government will listen.

THE DECISION IS FINALLY IN!!!

The “finally” part is directed at me, of course, not Justice McKelvey. She released her decision on June 11, 2020, an admirable 16 weeks after we finished final arguments, and, in the middle of the COVID crisis even.

By the time I finished plowing through all 228 pages, I was glad I did. Analyzing the decision gave me a deeper appreciation of the underlying dilemma – can the courts give constitutional proctection to collective bargaining, and still allow governments in Canada to govern with fiscal responsibility?

Turns out, yes they can. There is a balanced way to work through the legal maze of Section 2(d) – Freedom of Association, and still do what a government needs to do.

If you want to dig your way through the whole decision in Justice McKelvey’s original form, you can find it here.

If you want to follow through my summary, read on.

OVERVIEW

Before we get into the details, here’s an overview of the issues in the case, as Justice McKelvey saw and decided on them. For 228 pages, there isn’t that many (although contrary to what Heather Leonoff said during final argument, there was more than one).

The issues are:

I. Can the court rule on the PSSA even though it hasn’t been proclaimed yet?

Yes. Hooray! No more Elephant-in-the-Room hypothetical-decision bunkus.

II. Does the government have to conduct meaningful consultations with the unions before they legislate?

No they don’t, which wasn’t the issue that Labour was arguing, but in the end it doesn’t matter, because they are just as happy if the question of whether anyone has to consult before legislating would all go away.

III. Does the government have to give the unions a chance to conduct collective bargaining, before they legislate?

Nope, but this seems to have been a Labour throw-away anyway.

IV. Does the PSSA substantially interfere with collective bargaining in the Province?

Oh yes indeed, it sure does.

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

Nope, they failed on each and every part of the Oakes test.

discussion

This what Justice McKelvey had to say about all of these issues and all of the evidence, edited, summarized, and translated into regular-people speak by me.

Although I am going to write my version in her voice, I am going organize it differently that Justice McKelvey did. She summarized all the evidence, all the law, and then did her analysis. There are good judicial reasons for doing so – the trial judge has to make sure that the appeal court has your findings on all of the evidence, for one. But for explaining to normies, especially those who have suffered through all of the information on what this case is about, and now just want to understand what it all means, this doesn’t work as well.

Besides, it’s my blog, so I’m going to do it the way I like best. 😊

Even so, it does help to start the same way Justice McKelvey did – by reminding ourselves about what we are doing, and how we got here.

background & context

A. THE ACT

The Public Services Sustainability Act began as Bill 28, which was introduced in the Manitoba Legislature on March 20, 2017. The Government of Manitoba passed the PSSA on June 1, 2017, and it received royal assent the next day. The PSSA has not been proclaimed.

The purposes of the PSSA are set out in its Section 1:

Purposes

1. The purposes of this Act are:

(a)     to create a framework respecting future increases to compensation for public sector employees and to fees for insured medical and health services that reflects the fiscal situation of the province, is consistent with the principles of responsible fiscal management and protects the sustainability of public services;

(b)     to authorize a portion of sustainability savings identified through collective bargaining to fund increases in compensation or other employee benefits; and,

(c)     to support meaningful collective bargaining within the context of fiscal sustainability.

Labour objects to these sections of the PSSA:

 EMPLOYEES REPRESENTED BY A BARGAINING AGENT

Sustainability Period – Represented Employees

9(1)        For the purposes of sections 10 to 15, “sustainability period”, in relation to employees represented by a bargaining agent, means the four-year period that begins or began, as the case may be,

(a) on the expiry of the term of the collective agreement or arbitral decision that governed their rate or rates of pay on March 20, 2017; or

(b) if there was no collective agreement that governed their rates of pay on March 20, 2017, on the day the first collective agreement governing their rates of pay takes effect.

Term of collective agreement

9(2)        For the purpose of subsection (1), the term of a collective agreement is the term specified in the collective agreement without regard to any extension under a provision of the kind described in clause 63(2)(a) of The Labour Relations Act or by operation of that Act.

Twelve-month periods

10          In every collective agreement entered into or arbitral decision made before the end of the sustainability period, the rates of pay and additional remuneration must be based on 12-month periods.

No restructuring of rates of pay

11          No collective agreement or arbitral decision may provide for the restructuring of rates of pay during the sustainability period.

Maximum increases in rates of pay

12(1)       Subject to subsections (2) and (3), no collective agreement or arbitral decision may provide for an increase in a rate of pay during the applicable sustainability period that is greater than

(a) 0 % for the first 12-month period of the sustainability period;

(b) 0 % for the 12-month period immediately following the first 12-month period;

(c) 0.75 % for the 12-month period immediately following the second 12-month period;

(d) 1.0 % for the last 12-month period of the sustainability period.

Shortened sustainability period

12(2)       If employees governed by a collective agreement or arbitral decision received no pay increase for a 12-month period that began in 2016, on the recommendation of the Treasury Board, the Lieutenant Governor in Council may by regulation shorten the sustainability period for those employees to three years.

Maximum increases — shortened sustainability period

12(3)       The maximum increase in a rate of pay for employees to whom a three-year sustainability period applies under subsection (2) is

(a) 0 % for the first 12-month period of the sustainability period;

(b) 0.75 % for the 12-month period immediately following the first 12-month period;

(c) 1.0 % for the last 12-month period of the sustainability period.

Restrictions on additional remuneration

13          No collective agreement or arbitral decision may provide for an increase to existing additional remuneration — or for any new additional remuneration — for any employees during the applicable sustainability period unless

(a) the resulting increase in the cost of additional remuneration is not greater than the savings achieved by rates of pay less than those permitted by section 12; and

(b) the increase or new additional remuneration is approved by the Treasury Board.

Use of negotiated sustainability savings

14(1)       Despite sections 12 and 13, if a collective agreement provides for negotiated sustainability savings during the sustainability period, the Treasury Board may — in its sole discretion — approve the use of a portion of the savings to fund an increase to the compensation payable to employees during the last 24 months of the sustainability period under the collective agreement.

“Negotiated sustainability savings” defined

14(2)       For the purpose of subsection (1), “negotiated sustainability savings” means an ongoing reduction of expenditures as a result of measures agreed to in a collective agreement that reduce or avoid costs.

 

Also see Section 28 – retroactive claw back of any benefit over and above the PSSA limitations:

Debt Due

28. Every amount paid — including amounts paid before the coming into force of this Act — to any person in excess of the amount that should have been paid as a result of this Act is a debt due to the employer, in the case of an excess rate of pay, or to the government, in any other case. 

 

B. DEVELOPMENT OF THE PSSA

How the Government of Manitoba developed the PSSA and why comes up in a number of different places. Let’s leave the disreputable details for later. For now, the basics …

Justice McKelvey:

Soon after it was elected on April 19, 2016, the Pallister Government started investigating wage restraint legislation. On August 16, 2016 an Advisory Note was prepared for Cabinet, which suggested that:

… a public services sustainability model similar to Nova Scotia could be considered.

Nova Scotia had its own Public Services Sustainability Act, which at the time (2016) had also been passed but not yet proclaimed.

The Public Services Compensation Committee was struck on September 16, 2016. It consisted of six cabinet members, and Michael Richards, Elizabeth Beaupre, Gerry Irving, and Rick Stevenson. The PSCC discussed a one-year wage pause for all collective agreements at its first meeting on September 21, 2016. Irving was asked to return with some legislative options for the PSCC to consider.

The PSCC met a few more times to discuss legislative options, the Nova Scotia model, and the implications of a legal opinion they received on the constitutionality of the PSSA.

(I wish I knew what their legal opinion said about the passed-but-not-proclaimed business. I’m sure I would have told them, with all the lawyerly qualified, diplomatic, practical setting-out-of-choices-and-consequences I could muster, don’t be a doofus, do not do this.)

The first public mention of the PSSA was in the November 21, 2016 Throne Speech. The government indicated that the law would be designed after consultations and dialog with Labour.

On December 14, 2016, the Public Sector Compensation Committee approved a draft of the PSSA. It was based on the Nova Scotia model, had two years of 0% wage increases, and anticipated modest increases for years three and four.

Irving and Stevenson were under a lot of time pressure to get the PSSA ready to be passed as part of the Budget Speech, scheduled for March of 2017.

(If they missed this deadline, the PSSA would have to wait until the next year.)

In an Advisory Note dated January 5, 2017, Stevenson indicated that some form of meaningful collective bargaining would probably be required to defend against a constitutional challenge. It was thought that the modest wage increases in the third and fourth year as well as the sustainability savings would be enough.

(At least, that is the story the government was trying to sell to the court).

The terms of the PSSA were finalized on March 13, 2017. Included in the proposal to the PSCC for this final draft was the statement:

The surest means of establishing certainty in relation to increases in compensation and the public sector is to set out expectations in legislation. (Exhibit 3, PSSA Advisory Note.)

C. HISTORICAL PRECEDENTS

1. Zeros through Collective Bargaining

Manitoba’s public sector unions have agreed to 0% wage increases in collective bargaining in the past, most notably in 2010 and 2011, due to the 2008 global financial crisis.

The implication being – you don’t have to legislate wage freezes, government, you can bargain for it.

2. Other Wage Restraint Laws

There have also been wage restraint laws before, two in the Filmon Government in the early 1990’s. Nobody said so, nor did Justice McKelvey take judicial notice of it, but Premier Brian Pallister was Minister of Something-or-Other at the time, and, I’m told, these two pieces of legislation were all his idea, if not also under his purview.

Stevenson admitted on cross-examination that these two acts had an impact on the government’s labour relations. I presume Stevenson was acknowledging that it was a negative impact. We don’t have this statement in its context from the transcript, but it seems pretty clear.

THE ISSUES

For space, ease of reference, and web design sanity, I’m going to deal with each issue in a separate post. Some of them are short. Some of them are very long. C’est la vie. ‘Tis the way of the legal world. 

 

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

Wander through as you wish, and when you are finished, meet me at the next Aside: What Have We Learned from Justice McKelvey’s Decision (coming soon).

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.