On January 17, 2019, Nova Scotia’s Finance and Treasury Board (“NSFTB”) announced changes to the Province’s Equity Tax Credit program, a popular tax credit program that has been in place since 1994 and utilized by many Nova Scotia companies and investors in a number of different industries. The Province’s stated goal for re-working the Equity […]read more
Supreme Court of Canada Constitutionalizes Right to Strike
The Supreme Court of Canada has held, in Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, that the right to strike is an essential part of a meaningful collective bargaining process that is protected by the fundamental right of freedom of association set out in section 2(d) of the Canadian Charter of Rights and Freedoms (the “Charter”).
In 2007, the Saskatchewan government introduced legislation which prohibited public sector employees who were unilaterally designated as “essential service employees” from participating in any strike action against their employer. The legislation did not provide for any meaningful alternative mechanism for resolving a collective bargaining impasse. The unions whose employees were declared to be “essential service employees” challenged the constitutionality of the legislation.
Section 2(d) of the Charter guarantees the right of employees to associate for the purpose of advancing workplace goals through a process of collective bargaining. The SCC found that the right to strike is an essential part of a meaningful collective bargaining process. When strike action is limited in a way that substantially interferes with the process of collective bargaining, it must be replaced by one of the meaningful dispute resolution mechanisms commonly used in labour relations.
The fact that the legislation at issue prohibited employees from engaging in strike activity and did not provide for any meaningful alternative mechanism for resolving a collective bargaining impasse was held to amount to a substantial interference with their constitutional right to a meaningful process of collective bargaining and, as a result, violated section 2(d) of the Charter. The legislation was declared unconstitutional.
Implications of this Decision:
The practical impact of this decision on private sector employees is limited as the Charter, and the constitutional guarantees it enshrines, applies only to government actions.
Many provinces in Canada have legislation in place which designates some public sector employees to be “essential service employees” and prohibit those employees from striking. For example, it is common for legislation to prohibit police officers, fire fighters and health care workers from engaging in strike activity.
What has been made clear by the Supreme Court of Canada is that where legislation prohibits public sector employees from engaging in strike activity, the legislation must provide some sort of meaningful alternative mechanism for resolving a collective bargaining impasse. One of the most common alternative mechanisms is binding interest arbitration. In binding interest arbitration, an arbitration board will hear representations from both parties with respect to the collective bargaining matters that are in dispute and will issue a decision which sets out the terms of the collective bargaining agreement which will then bind the parties.
However, the alternative mechanism of binding interest arbitration often leaves much to be desired. Rather than bargaining the terms of a collective agreement, a collective agreement is imposed by an arbitration board. Although an arbitration board is tasked with attempting to replicate what the parties might have arrived at if they had been left to free market forces, public sector employers often lament that arbitration boards fail to put sufficient weight on the financial implications of their decisions. The financial terms of an interest arbitration decision (e.g. wage increases, pension plans, etc.) can often wreak havoc on the budgets of public sector employers.