Public Sector Unions Take Aim at Federal Government’s Wage Restraint and Pay Equity Laws

By Jo-Anne Pickel

The two largest federal public sector unions – the Professional Institute of the Public Service of Canada (PIPSC) and the Public Service Alliance (PSAC) – each have launched Charter challenges to the wage restraint and pay equity laws passed as part of the federal budget in March. Both unions, as well as other public sector unions, have steadfastly opposed both pieces of legislation from the time they were introduced. Both statutes were included in the government’s Economic and Fiscal Statement that precipitated the suspension of Parliament last November. Both unions are challenging the wage restraint legislation as a violation of the freedom of association guaranteed under s. 2(d) of the Charter. They are both challenging the government’s wide ranging changes to – and erosion of – pay equity protections for public sector workers as a violation of the equality rights protected under s. 15 of the Charter.

Public Sector Wage Restraints

The Expenditure Restraint Act severely restricts the ability of public sector unions and workers to negotiate pay rates and compensation with their employers. The Act compromises the essential integrity of the process of collective bargaining. It does so by invalidating the fruits of past collective bargaining and pre-emptively undermining future collective bargaining on one of the most important issues to workers: compensation.

The Expenditure Restraint Act establishes the following wage caps:

2006-2007 fiscal year, 2.5%
2007-2008 fiscal year, 2.3%
2008-2009 fiscal year, 1.5%
2009-2010 fiscal year, 1.5%
2010-2011 fiscal year, 1.5%

 

The legislation interferes with collective bargaining in three primary ways:

(a) it invalidates existing collective agreement provisions containing wage increases that exceed these wage caps, thus undermining the past bargaining processes that formed the basis for these agreements;
(b) it permits the government to claw back any compensation that workers received under freely bargained collective agreements that exceeds the caps set out in the Act; and
(c) it prohibits increases to compensation in future collective agreements that exceed the caps set out in the Act, thus undermining future collective bargaining over compensation during the restraint period.

In the 2007 B.C. Health Services case, the Supreme Court of Canada ruled that s. 2(d) of the Charter protects workers’ right to bargain collectively. The Court held that the government “must not substantially interfere with the ability of a union to exert meaningful influence over working conditions through a process of collective bargaining conducted in accordance with the duty to bargain in good faith.”

Both PIPSC and PSAC are challenging the Expenditure Restraint Act as a violation of freedom of association as it denies the process of good faith negotiation and consultation that is protected under s. 2(d).

Erosion of Pay Equity

The federal government’s budget legislation also included the Public Sector Equitable Compensation Act (PSECA), a statute which overhauls the pay equity system applicable to public sector workers.

The PSECA violates the fundamental equality right of women and other workers in female dominated jobs in the federal public sector to be free from wage discrimination. The legislation perpetuates ongoing sex-based wage discrimination by the federal government:

(a) The Act fundamentally erodes the substantive right of women and other workers in female dominated jobs to be free from sex-based wage discrimination.

(b) It establishes procedures that deny these workers the ability to effectively implement and enforce even these eroded substantive rights; and

(c) It imposes remedial restrictions which deny these workers the right to have sex-based wage discrimination fully eradicated and prevented.

The PSECA redefines key pay equity concepts and wrests these concepts from their quasi-constitutional human rights underpinnings in the Canadian Human Rights Act. Among other substantive changes, the PSECA redefines the criteria to be applied in assessing the value of work performed, restricts the pool of workers who will who will receive protection under the Act, and limits the comparators to be considered during an assessment.

Having restricted substantive rights to pay equity, the PSECA restricts pay equity further by fundamentally changing the processes by which pay equity is implemented and enforced. Prior to the passage of the PSECA, public sector workers had a right to file human rights complaints challenging wage discrimination under the Canadian Human Rights Act. The PSECA extinguishes this right. Pay equity for unionized workers must now be dealt with by employers and unions through the collective bargaining process. Pay equity is now to be treated as any other issue to be bargained rather than as an independent fundamental right to equal pay for equal work of equal value.

The PSECA makes employers and unions jointly responsible for providing equitable compensation to unionized workers under the PSECA even though unions have no control over the federal purse. Moreover, the Act places public sector unions in the invidious position of having to trade their members’ equality rights against their other interests in the collective bargaining process. It also exposes unions to potential duty of fair representation complaints under the Public Service Labour Relations Act if they fail to achieve equitable compensation for their members; or if they negotiate lower compensation for the general membership in order to accommodate pay equity issues.

Beyond these significant changes, the PSECA contains serious process flaws that will limit the pay equity protections likely to be achieved by public sector workers. By doing so, it permits sex-based wage discrimination to continue in the federal public service.

Finally, the PSECA severely restricts the pay equity remedies currently available to public sector workers in several ways, thus permitting and perpetuating the continuation of sex-based wage discrimination.

Both PIPSC and PSAC are arguing that these fundamental changes to pay equity protections for public sector workers violate the equality rights protected under s. 15 of the Charter.

The Professional Institute of the Public Service of Canada is represented in this Charter challenge by Paul Cavalluzzo, Mary Cornish and Jo-Anne Pickel. For the Institute’s press release announcing the Charter challenge, click here.