ONCA Upholds Constitutionality of Legislating Salary Caps: How will this affect Ontario teachers?

In a recent decision, Association of Justice Counsel v. Canada (Attorney General), the Ontario Court of Appeal upheld the constitutionality of federal legislation prescribing limits on salary increases for unionized employees.

The case involved a challenge to the constitutionality of changes made to the Expenditure Restraint Act (“ERA”), providing limits on increases in compensation for lawyers who were members of the Association of Justice Counsel and other federal employees.

The Association of Justice Counsel (the “Association”) was in the midst of a lengthy collective bargaining process with the Treasury Board Secretariat (the “TBS”) when the legislation was amended.  The salary caps in the legislation mirrored the final offer made by the TBS before the parties, at an impasse, began the arbitration process.  The maximum salary increases prescribed in the legislation were ultimately adopted into the collective agreement.

The Association alleged that the legislation violated its right to freedom of association under the Canadian Charter of Rights and Freedoms, by infringing its right to engage in collective bargaining.

The Court of Appeal found that the Association’s Charter rights had not been violated. Citing the Supreme Court’s decision in Ontario (Attorney General) v. Fraser, it held that the Charter protects the right to engage in collective bargaining in good faith but it does not impose any particular process and does not guarantee a legislated dispute resolution mechanism in the case of an impasse. Although the Court recognized that the legislation had the effect of taking the issues of wages off the bargaining table, this alone did not violate the Charter.

The Court found that the constitutional protection is limited to allowing the parties the opportunity to engage in a process whereby they may present their demands and have those demands considered in good faith. The Court further provided:

Fraser makes clear that s. 2(d) has limits: it does not guarantee any dispute resolution process after the parties have reached an impasse and it does not guarantee any particular outcome. In my view, the validity of the ERA must be assessed on the basis of whether, at the time it was enacted, the parties had had the opportunity for a meaningful process of collective bargaining. If they had, s. 2(d) is satisfied. The faint hope of further negotiations in the shadow of a dispute resolution mechanism not protected by s. 2(d) cannot expand or extend the reach of s. 2(d) beyond its core guarantee.

What this decision does not make clear is precisely when the constitutional right to bargain is exhausted and when legislative measures can be taken. The decision is certainly topical in light of the controversy surrounding the Ontario Government’s  Bill 115,  that went through its first reading on Monday, which  will take key issues in the bargaining dispute between the Ontario Government and teachers off the table.  The Bill includes wage freezes for the next two years as well as other measures to reduce costs.  The constitutionality of this Bill once enacted will likely be the source of litigation.

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