Definitive Report - Report No 381, March 2017

Case No 3143 (Canada) - Complaint date: 13-MAY-15 - Closed

Allegations: In Case No. 3143 the CLC alleges that some amendments to the Public Service Relation Act (PSLRA), contained in the omnibus budget implementation legislation entitled Economic Action Plan 2013 Act, No. 2 (Bill C-4), infringe the right to bargain collectively and the right to strike. In Case No. 3151, the CLC and PSI allege that the omnibus budget implementation legislation entitled Economic Action Plan 2015, No. 1 (Bill C-59) created exemptions to the PSLRA, which infringe the right to bargain collectively

1. 173. The complaint in Case No. 3143 is contained in a communication dated 13 May 2015 submitted by the Canadian Labour Congress (CLC) on behalf of the National Joint Council (NJC) bargaining agents. The complaint in Case No. 3151 is contained in a communication dated 10 September 2015 submitted by the CLC and Public Services International (PSI), also on behalf of the NJC bargaining agents.
2. 174. The Government of Canada transmitted observations on the allegations in both cases in communications dated 31 March and 29 April 2016, and 25 January 2017.
3. 175. Canada has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). It has not ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the Labour Relations (Public Service) Convention, 1978 (No. 151), or the Collective Bargaining Convention, 1981 (No. 154).
4. 176. The Committee examines Cases Nos 3143 and 3151 together as both were brought on behalf of the NJC bargaining agents in respect of the measures taken by the Government to amend the Public Service Labour Relations Act (PSLRA) through the successive omnibus budget implementation legislative acts.

A. The complainants’ allegations

1. 177. By a communication dated 13 May 2015, the CLC brings a complaint on behalf of the NJC bargaining agents in respect of the legislative measures taken by the Government to amend the PSLRA through the omnibus budget implementation legislation entitled Economic Action Plan 2013 Act, No. 2 (Bill C-4), as well as related transitional measures, which infringe the right to bargain collectively and the right to strike.
2. 178. The CLC explains that the NJC membership includes 18 public service bargaining agents, the Treasury Board and a number of “separate employers”. Its purpose is to facilitate co development, consultation and information sharing between the Government as employer and public service bargaining agents in the federal public service on issues such as workforce adjustment, safety and health, the bilingual bonus and public service health plans. The following 18 unions and workers’ associations belong to the NJC bargaining agents group:
3. ■ Association of Canadian Financial Officers
4. ■ Association of Justice Counsel
5. ■ Canadian Air Traffic Control Association, CATCA Unifor, Local 5454
6. ■ Canadian Association of Professional Employees (CAPE)
7. ■ Canadian Federal Pilots Association
8. ■ Canadian Merchant Service Guild
9. ■ Canadian Military Colleges Faculty Association
10. ■ Federal Government Dockyard Chargehands Association
11. ■ Federal Government Dockyard Trades and Labour Council (East)
12. ■ Federal Government Dockyard Trades and Labour Council (West)
13. ■ International Brotherhood of Electrical Workers, Local 2228
14. ■ Professional Association of Foreign Service Officers
15. ■ Professional Institute of the Public Service of Canada (PIPSC)
16. ■ Public Service Alliance of Canada (PSAC)
17. ■ Research Council Employees’ Association
18. ■ Unifor, Local 2182
19. ■ Unifor, Local 87-M
20. ■ Union of Canadian Correctional Officers – CSN
21. Jointly, the NJC bargaining agents represent approximately 230,000 federal Government workers, occupying diverse positions including Foreign Service, law, translation, health services, computer systems, program and administrative services, correctional services, and border services. Thus, the NJC bargaining agents represent both public servants exercising authority in the name of the State, as well as many other public servants who do not exercise such authority.
22. 179. The complainant further explains that employees in the bargaining units affected by the Bill C-4 amendments to the PSLRA are employed by the Treasury Board of Canada Secretariat in the core federal public service, as well as at the following federal Government agencies and organizations:
23. ■ Canada Revenue Agency (CRA)
24. ■ Canadian Food Inspection Agency (CFIA)
25. ■ Canadian Nuclear Safety Commission (CNSC)
26. ■ Canadian Security Intelligence Service (CSIS)
27. ■ Communications Security Establishment, DND (CSE)
28. ■ National Capital Commission (NCC)
29. ■ National Energy Board (NEB)
30. ■ National Film Board (NFB)
31. ■ National Research Council of Canada (NRCC)
32. ■ Office of the Auditor General Canada (OAGC)
33. ■ Office of the Superintendent of Financial Institutions (OSFI)
34. ■ Parks Canada Agency (PCA)
35. ■ Social Sciences and Humanities Research Council (SSHRC)
36. ■ Staff of the Non-Public Funds, Canadian Forces (SNPFCF)
37. ■ Statistical Survey Operations (SSO)
38. 180. The CLC indicates that Bill C-4 was introduced for the first reading in the federal House of Commons on 22 October 2013. This complex omnibus budget implementation legislation was over 300 pages long and amended approximately 20 different federal statutes, including the PSLRA. The complainant alleges that the amendments to the PSLRA were neither minor nor technical but rather entailed a fundamental overhaul of the statutory labour relations regime applicable to federal public servants, particularly with respect to the dispute resolution process in the event of bargaining impasses and the process for the designation of essential service positions. Bill C-4 also contained transitional provisions applicable to the round of bargaining commenced at the time of the complaint.
39. 181. The CLC alleges that Bill C-4 amendments to the PSLRA were introduced in Parliament without any prior consultation with the unions or workers affected by the changes, nor with the affected administrative tribunals. According to the complainant, the short time frame between when Bill C-4 was introduced (22 October 2013) until when it received Royal Assent (12 December 2013) made it practically impossible for the bargaining agents, or other subject matter experts, to be adequately consulted in good faith or at all, or to have sufficient time to express their views. While a handful of union representatives appeared before the Standing Committee on Finance to express concerns at the amendments to the PSLRA contained in Bill C-4, the total time allotted for their testimony was less than three hours. According to the CLC, even more problematically, the deadline for amendments to the Bill was set at 9 a.m. on the morning of the union representatives’ testimony before the Committee, which only commenced at 11 a.m. The CLC considers that in no way such a process can be considered adequate consultation.
40. 182. The complainant indicates that further amendments to the transitional provisions to the PSLRA amendments in Bill C-4 were included in section 309 of Economic Action Plan 2014 Act, No. 1 (Bill C-31), which received Royal Assent on 19 June 2014.
41. 183. The CLC alleges that the Economic Action Plan 2013 Act amended the PSLRA so as to infringe the right to bargain collectively and the right to strike in the federal public service. In particular, the CLC refers to sections 119–125 of the amended PSLRA, which set out a new process for the designation of essential services and essential service positions and allow the employer to unilaterally determine which services are essential and to designate essential service positions at any time. Moreover, the complainant points out that the definition of essential services is not limited to only clear and imminent threats but broadly defines essential services as any service, facility, or activity that “is or will be necessary for the safety or security of the public or a segment of the public”. In other words, even the hypothetical possibility that a service may be essential at some point in the distant future is captured by the definition, which as a result, allows services and positions that are not truly essential to be so designated. The CLC further points out that, while section 122 requires the employer to consult with the bargaining agent about the designated positions during the course of a 60-day consultation period, there is no mechanism to independently review or challenge the employer’s unilateral designations. The complainant explains that under the prior version of the statute, if the employer and bargaining agent were unable to enter into an essential services agreement, either of them had the option to apply to the Public Service Labour Relations Board (now the Public Service Labour Relations and Employment Board) to determine which services are essential and the type, number and specific positions to be designated as such in an agreement. According to the complainant, the parties effectively used this process in the past.
42. 184. The complainant submits that, as a result of this new essential service designation process, the employer has improperly designated a number of positions as essential in a round of bargaining which commenced in 2014. It refers to the following examples:
    • ■ Applied Science and Patent Examination (SP) Group: 78 per cent of all federal Government meteorologist positions in the SP Group were designated essential, including interns whose work must be continually supervised, meteorologists who were engaged in daily public forecasting (as opposed to essential weather forecasting, such as severe weather, maritime or aviation forecasting) and meteorologists engaged in ongoing research and long-term software maintenance. Despite the fact that the bargaining agents challenged the improper designation of these positions in the context of the consultation process, the employer made almost no changes to the designations.
    • ■ Border Services (FB) Group, composed of border guards, along with those involved in the collection of duties and taxes and trade compliance: pursuant to a draft essential services agreement that was proposed by the Government in 2013 and governed by the previous legislation, approximately 80 per cent of the FB Group bargaining unit was designated essential, but union members working at the border were only required to perform duties related to safety and security and were not required to collect duties and fees during a strike. However, once Bill C-4 changes came into effect, approximately 88 per cent of positions in the same bargaining unit were unilaterally designated as essential by the employer and required that all duties were to be performed, not just those related to safety and security. Given that neither the positions, nor the services these employees provided changed in any significant manner in the months in between, the complainant submits that there is no justifiable basis for the employer to have designated so many more positions as essential.
    • ■ Hundreds of new positions that deal exclusively with monetary trade policies that had never been designated as essential previously were now designated essential.
43. 185. The complainant further points out that, pursuant to section 125(2), an employee who was designated essential must perform all of the duties of their position, not just those duties that are essential. In other words, an employee who only performed essential services duties for 10 per cent of the time, must still perform 100 per cent of their duties. Thus, according to the CLC, the law created an incentive for the employer to sprinkle essential service duties between a number of positions resulting in a higher number of positions being designated essential overall. The CLC submits that section 125(2) further undermined the ability of the remainder of the bargaining unit to mount an effective strike and refers to the following example. The Veterinary Medicine (VM) Group, which is employed by the Canadian Food Inspection Agency, has been designated as 70 per cent essential. Its ability to mount an effective strike with the remaining non-essential portion of the bargaining unit has been grossly undermined by the fact that, pursuant to section 125(2) of the PSLRA, their “essential” colleagues are required to perform non-essential work during the strike.
44. 186. The complainant further alleges that the amendments have resulted in some other non-essential employees being denied the right to strike and forced to use compulsory arbitration in the event of a bargaining impasse, even though they are not performing essential services. The CLC refer to sections 194(1)(f) and (2) and 196(f), which prohibit employees whose positions have been designated as essential from engaging in any form of strike action.
45. 187. According to the complainant, along with essential service designations, the legislative amendments have also changed the process for dispute resolution in the event of a bargaining impasse. While section 103 provides that the process for the resolution of disputes between an employer and the bargaining agent for a bargaining unit is conciliation, section 104 provides two exceptions. Arbitration is the dispute resolution mechanism pursuant to section 104(1), where both the employer and bargaining agent agree, and pursuant to section 104(2), where on the day on which notice to bargain collectively may be given, 80 per cent or more of the positions in the bargaining unit have been designated as essential under section 120.
46. 188. The CLC claims that the combined effect of sections 103–104 and 119–125 is twofold. On the one hand, non-essential workers in bargaining units with over 80 per cent designation are denied the right to strike and forced to accept compulsory arbitration, regardless of whether or not they want to strike and/or believe they can mount an effective strike. On the other hand, in bargaining units where the level of designation is 79 per cent or less, although the non-essential workers are allowed to strike, the essential service workers in the bargaining unit are prohibited from striking pursuant to section 194(2) and are also denied access to independent arbitration to compensate for that prohibition. The CLC considers that the 80 per cent threshold for accessing arbitration is both unduly high and arbitrary as a bargaining unit’s ability to mount an effective strike is severely undermined in a situation where the level of essential service designation makes impossible the meaningful exercise of the right to strike and there is no provision for an alternative, effective and independent dispute resolution mechanism.
47. 189. The CLC further alleges that even groups that have been designated as over 80 per cent essential have been denied access to arbitration as a result of transitional provisions in Bill C 4. According to the employer’s interpretation of these provisions, any bargaining unit which did not have an essential services agreement in force on 12 December 2013, was on the conciliation/strike route for the current round of bargaining, even if over 80 per cent of the bargaining unit was designated essential and prohibited from striking. One such group caught by the transitional provision was the Ships Officers (SO) Group, which represents captains, engineers, and other officers working on vessels for the Canadian Coast Guard and in non-military positions on certain vessels of the Department of National Defence. For the current round of bargaining, 96 per cent of the bargaining unit has been designated as essential. Given the nature of the services provided by the Coast Guard, the SO group does not dispute the fact that these positions are essential. In fact, it was precisely because such a high percentage of its membership was engaged in providing essential services that the SO group had previously chosen arbitration as the dispute resolution mechanism under earlier rounds of collective bargaining. Despite this high level of essential service designation, the Government has informed the SO group that they are on the conciliation/strike route, pursuant to the transitional provisions. As a result, in the event of bargaining impasse 96 per cent of the group will be denied the right to strike and also denied access to any arbitration proceedings.
48. 190. The complainant further raises concerns with respect to both the arbitration and conciliation processes themselves. The CLC alleges that for those limited groups of employees who have access to arbitration and are truly essential, the adequacy of the arbitration process as a replacement for the right to strike is vitiated by the fact that the legislation statutorily prescribes and limits the criteria that an arbitration board may consider when making an arbitral award, thereby compromising the independence and impartiality of the arbitration process. The independence and impartiality of the Public Interest Commission (PIC) as part of the conciliation process were similarly undermined by the same statutorily prescribed limits on the criteria that the PIC may consider in its report.
49. 191. In this respect, the CLC indicates that for the limited number of bargaining units that have access to arbitration in the event of a bargaining impasse, section 148 of the PSLRA requires an arbitration board to give preponderance to two factors when making an award, including “Canada’s fiscal circumstances relative to its stated budgetary policies”, thereby unduly interfering with the independence of the arbitration board. In addition, the board is to make its decision on the basis of whether the award “represents a prudent use of public funds” and is “sufficient to allow the employer to meet its operational needs”. Effectively, not only is the arbitration board required to give preponderance to the Government’s ability to pay but to the Government’s willingness to pay as determined by the Government itself. Section 175 requires the PIC, as part of the conciliation process, to consider the same preponderant factors and make its decision on the same narrow basis. Finally, the CLC submits that sections 158.1 and 179 further interfere with the independence and impartiality of the arbitration and conciliation processes by giving the Chairperson of the Public Service Labour Relations and Employment Board, on his or her own initiative, the authority to direct either the arbitration board or the PIC to review its arbitral award or report if “in his or her opinion” the preponderant factors have “not been properly applied”. The complainant submits that the legislative imposition of fiscal limitations and government policy on arbitration boards and PIC compromises the independence and integrity of the arbitral and conciliation processes and fundamentally undermines the confidence of the parties in those processes. NJC bargaining agents have serious concerns with the independence and impartiality of both the conciliation and arbitration procedures, which no longer have the confidence of all parties involved.
50. 192. The CLC informs that, on 24 March 2014, one of the NJC bargaining agents, the PSAC, filed an application in the Ontario Superior Court of Justice alleging that a number of the Bill C-4 amendments to the PSLRA are unconstitutional and violate section 2(d) of the Canadian Charter of Rights and Freedoms, and that this violation is not saved by its section 1. On 14 May 2015, another NJC bargaining agent, the PIPSC, also filed a separate application to challenge the constitutionality of the amendments.
51. 193. By a communication dated 10 September 2015, the CLC and PSI submit a complaint on behalf of the NJC bargaining agents in connection with the legislative measures taken by the Government with the omnibus budget implementation legislation entitled Economic Action Plan 2015 Act, No. 1 (Bill C-59). The complainants allege that this Act restricts the scope of collective bargaining by granting the Government the power to make changes to the existing collective agreements without negotiating with the affected workers’ associations. The complainants indicate that sections 253–273 of Act No. 1 create exemptions to the PSLRA, and other instruments, that allow the employer to remove, amend and unilaterally impose terms and conditions of employment related to sick leave and disability insurance that were formerly freely negotiated through collective bargaining.
52. 194. According to the complainants, in 2013, a year before collective bargaining was set to begin between the employer and each NJC bargaining agent, the Treasury Board made clear its intention to replace existing sick leave benefits with a short-term disability plan and began a public campaign against the existing sick leave benefits by publishing misleading statistics about the rate of sick leave usage in the public service. According to the complainants, the President of the Board claimed that unionization was responsible for “psychological entitlement” which leads to absenteeism. Furthermore, on 9 December 2013, before collective bargaining had begun, the Treasury Board informed potential insurance providers of the Government’s intention to procure a short-term disability plan and to re-tender the existing disability insurance plans and related requirements.
53. 195. The complainants inform that, in July 2014, the PSAC and PIPSC filed an unfair labour practices complaint before the Public Service Labour Relations Board alleging that the Treasury Board interfered with the collective bargaining by sending communiqués directly to employees regarding its Workplace Wellness and Productivity Strategy, the language of which left employees in no doubt that a new sick leave regime was a “fait accompli”.
54. 196. The complainants allege that when the NJC bargaining agents each began renegotiating their collective agreements, the Treasury Board negotiators made it clear that any renewed collective agreement must include the proposed sick leave reductions and that no compensation would be offered for the removal of benefits. The CLC and PSI further allege that the Treasury Board negotiators were unable to answer many basic questions from the NJC bargaining agents, including questions about the projected costs of the Short-Term Disability Plan (STDP), the number of workers who would manage disability files, and whether the STDP would be managed internally or by a private sector third party. While negotiations were ongoing, the Government announced that the April 2015 federal budget would include 900 million Canadian Dollars (CAD) in savings from reductions in leave benefits. The complainants point out that, prior to the budget announcement, the Government had not informed the bargaining agents of its intention to resort to legislation.
55. 197. The Bill was introduced into the House of Commons on 7 May 2015 and received Royal Assent on 23 June 2015. The complainant organizations explain that the short time frame made it impossible for bargaining agents to be adequately consulted or to have sufficient time to express their views; that there was insufficient time to properly study the usage of sick leave within the public services and to verify the Government’s projected cost savings, which had been criticized as wildly inflated; and that while union representatives from three of the 18 NJC bargaining agents were invited to appear before the House of Commons Standing Committee on Finance to express their concerns, the Committee spent less than an hour hearing their testimony.
56. 198. The complainants submit that the impact of Act No. 1 on labour relations between the Government and public servants is neither minor nor technical. The Act entails the removal of important sick leave related terms and conditions of employment from the scoop of collective bargaining. For an indefinite period of time, the employer is authorized to rewrite existing collective agreements to remove or modify negotiated sick leave benefits. The complainants challenge the following provisions of Act No. 1:
    • – Section 254 allows the Treasury Board to rewrite the sick leave provisions of existing collective agreements without consulting with the relevant bargaining agents.
    • – Section 254(2)(a) allows the Treasury Board to remove or reduce the sick leave to which employees are entitled under their respective collective agreements.
    • – Section 254(2)(b) allows the Treasury Board to modify provisions in collective agreements relating to the circumstances under which unused sick leave is carried forward from year to year.
    • – Section 254(2)(c) allows the Treasury Board to unilaterally remove “banks” of sick leave that had been carried forward from previous years.
    • – Section 257 allows the Treasury Board to override protections in place with the PSLRA for terms and conditions of employment in force during the bargaining process that are inconsistent with the terms established by the Treasury Board.
    • – Section 254(1) allows the Treasury Board to set an effective date, and for the four years following the effective date, section 258(1) renders ineffective any arbitral award that is inconsistent with the terms imposed by the Treasury Board.
    • – Sections 260–266 authorize the Treasury Board to create a new short-term disability programme, which is intended to replace the sick leave benefits that are removed under section 254.
    • – Section 262 removes the proposed short-term disability programme from the scope of collective bargaining for a period of four years following the effective date. For a period of four years following the “effective date” any terms in negotiated or awarded collective agreements that conflict with the programme imposed by the Treasury Board are rendered ineffective.
57. 199. According to the complainants, if there had been a deadlock in negotiations, the appropriate response would have been to refer the matter to independent arbitration or conciliation rather than to impose new conditions of employment through legislation. Notwithstanding, the complainants’ note that the availability of third-party arbitration has been undercut by section 258(1) of the Act which disallows arbitral awards that are inconsistent with the sick leave benefits imposed by the Treasury Board.
58. 200. On 26 June 2015, the CAPE and PIPSC, jointly with 10 other NJC bargaining agents, filed an application before the Ontario Superior Court of Justice alleging that the provisions of Act No. 1 (Bill C-59) relating to sick leave were unconstitutional. On 30 June 2015, the PSAC filed an application before the same court alleging unconstitutionality of the same provisions. On 10 August 2015, the PIPSC and PSAC each filed a motion for an injunction requesting that the Ontario Superior Court of Justice issue an order staying the operation of sections 253–273 of Act No. 1.
59. 201. The complainants indicate that, although the Treasury Board has yet to exercise the power to modify sick leave, the Government has indicated that it will do so if it is unable to achieve concessions through negotiation. The complainants explain that all current collective agreements include language granting employees sick leave credits. Employees who are unable to perform their duties because of illness or injury may be placed on sick leave if they have sufficient sick leave credits. While on sick leave employees receive their full rate of pay. The existing collective agreements grant each full-time employee one and a quarter days of sick leave for each month of employment. In total, employees receive 15 days of sick leave each year. Unused sick leave credits accumulate in a “bank” which is carried forward from year to year. Many public employees accumulate significant “banks” of sick leave, which they rely on when faced with prolonged illnesses, injury and/or medical procedures. These “banks” allow public servants to avoid drawing a reduced salary under employment insurance while waiting the 13 weeks necessary to access the long-term disability programme.
60. 202. According to the CLC and PSI, the Treasury Board proposes to substantially reduce the allocation of sick leave credits and replace the removed benefits with a short-term disability programme. Under the proposal, among others, sick leave credits that have been “banked” over the course of an employee’s career will be removed without compensation and sick leave credits will no longer carry forward from year to year; the annual allocation of sick leave credits will be reduced from 15 to six days per year; the sick leave allotment will be supplemented with a new short-term disability programme, which provides employees with no income for the first seven calendar days in which they are unable to fulfil their duties (employees may use their sick leave credits or vacation days during the waiting period in order to receive pay).

B. The Government’s reply

1. 203. In its communication dated 31 March 2016, the Government explains that Bill C-4 amends aspects of the collective bargaining and recourse system provided by the PSLRA regime and further amends the dispute resolution process for collective bargaining by removing the choice of dispute resolution method and substituting conciliation, which involves the possibility of the use of strikes as the method by which the parties may resolve impasses. In cases where 80 per cent or more of the positions in the bargaining unit are considered necessary for providing essential services, the dispute resolution mechanism is to be arbitration. Under the amended PSLRA, the employer has the right to determine which service is essential and the number of positions that will be required to provide that service, subject to a consultation process with bargaining agents. In addition, Bill C-4 amends the factors that arbitration boards and PICs must take into account when making awards or reports, respectively.
2. 204. In its communication dated 29 April 2016, the Government explains that division 20 of Part 3 of Bill C-59 contains provisions authorizing the Treasury Board of Canada to establish and modify terms and conditions of employment related to the sick leave of employees on the core public administration. It also authorizes the Treasury Board to establish and modify a short-term disability programme and it requires the Treasury Board to establish a committee to make joint recommendations regarding modifications to that programme. Finally, it authorizes the Treasury Board to modify the existing public services long-term disability programmes in respect of the period during which employees are not entitled to receive benefits. These authorities would only be exercised on the recommendation of the President of the Treasury Board. The Government points out that the President has never made a recommendation under the Bill and the measures outlined in Division 20 have never been implemented.
3. 205. The Government points out that since both Bills received Royal Assent, on 12 December 2013 and 23 June 2015, respectively, a new Government was elected. On 22 March 2016, the Government tabled the federal Budget 2016 “Growing the Middle Class” where it reconfirmed its commitment to respect the collective bargaining process and to negotiate in good faith with public service bargaining agents:
   • Demonstrating its commitment to fully respect the collective bargaining process, the Government has already introduced new legislation to repeal the legislative provisions that provide it with the power to make unilateral changes to the disability and sick leave system. It also reversed the previous Government’s decision to book savings in respect of changes to the public service disability and sick leave system in advance of the completion of negotiations. The Government will also consult on changes to the Public Service Labour Relations Act introduced through the 2013 Budget Implementation Act.
4. 206. The Government highlights that the above statement in the budget reconfirms the Government’s position and informs that, in January 2016, the President of the Treasury Board stated that the Government intends to engage in consultation with public sector stakeholders to revisit the provisions introduced through Bill C-4. In its communication, the Treasury Board further advised federal public sector unions that it intended to make the repeal of Division 20 of Bill C-59 one of its first orders of business. The Treasury Board also confirmed that, in the meantime, the Government would not exercise the powers contained in that legislation to unilaterally implement a disability and sick leave management system. The Government also indicates that, upon receipt of this correspondence, the PSAC and PIPSC adjourned their challenges to Bill C-4 brought pursuant to section 2(b) (freedom of association) of the Canadian Charter of Rights and Freedoms in the Ontario Superior Court. The unions have undertaken to withdraw this litigation completely upon the coming into force of the repeal legislation.
5. 207. The Government informs that Bill C-5, an Act to repeal Division 20 of Part 3 of the Economic Action Plan 2015 Act, No. 1 was introduced and first read in the House of Commons on 5 February 2016.
6. 208. The Government forwards a copy of a communication from the President of the Treasury Board dated 3 June 2016 addressed to the Head of the NJC bargaining agents:
   • The purpose of this letter is to confirm the Government of Canada’s intention to table legislation in the fall 2016 session of Parliament, which would repeal all Bill C-4 Division 17 (Economic Action Plan 2013 Act, No. 2) […] changes to provisions of the Public Service Labour Relations Act (PSLRA). This letter serves to confirm the interim measures that will facilitate the current round of collective bargaining.
   • The Government of Canada will table legislation in the fall to restore the public service labour relations regime that existed prior to the legislative changes introduced in 2013. Some often most contentious changes for bargaining agents were: allowing the employer the ability to designate essential services unilaterally, making conciliation/strike the default conflict resolution process, and prescribing new preponderant factors that Public Interest Commissions (PIC) and arbitration boards must consider when making recommendations or awards.
   • The following interim measures will be effective for the current round of bargaining and would cease once new legislation is passed.
   • These interim measures are meant to support a timely resolution of this round of bargaining. While the measures must be permissible under the current legislation, they are meant to reflect, to the extent possible, the spirit Bill C-4 regime.
   • 1. Choice of Dispute Resolution Method:
   • All bargaining units within the core public administration and/or separate agencies that are currently on the conciliation/strike route may request to switch to either arbitration under PSLRA s. 104(1) or “binding conciliation” of all matters under PSLRA s. 182. […]
   • Any bargaining unit within the core public administration and/or a separate agency that is currently on the arbitration route by agreement of the parties (PSLRA s. 104(1)) may request to switch to “binding conciliation” of all matters under PSLRA s. 182. […]
   • With respect to bargaining units on the arbitration route pursuant to PSLRA s. 104(2), should the parties reach an impasse in negotiations, the employer undertakes not to request arbitration before the legislation is passed on the understanding that the bargaining agent undertakes not to allege that this constitutes an unfair labour practice pursuant to section 106 of the PSLRA.
   • 2. Preponderant Arbitration/Conciliation Factors:
   • Bargaining agents within the core public administration and separate agencies may submit to a PIC or arbitration board that the Commission or Board as a truly independent third party, is free to weigh the factors as it sees fit without regard to Preponderance. The employer shall not object to this submission, nor will it argue that any factor is “preponderant”.
   • The employer also undertakes to advise the Commission or Board that Canada’s fiscal circumstances relative to its stated budgetary policies are not a material factor. However, the Government of Canada retains the right to make arguments on the state of the Canadian economy, as well as the necessity of attracting competent persons to, and retaining them in, the public service in order to meet the needs of Canadians.
   • As the “binding conciliation” process under PSLRA s. 182 allows the parties to agree on all aspects of the process, the employer agrees that the factors found in the pre Bill C-4 legislation (i.e. former PSLRA s. 148) shall be used for this process and if any disputes arise with respect to the administration of the “binding conciliation” process either party may apply to the Chair of the PSLREB, or their designate, for a timely resolution of the issue(s).
   • 3. Essential Services:
   • For the core public administration, the employer shall issue a directive to each department advising that any employee occupying a position designated as essential, shall not be assigned non-essential work in the event of a strike. This directive shall be issued on or before June 30, 2016 and again once any bargaining unit is in a legal strike position.
   • For bargaining units within the core public administration that remain on the conciliation/strike route, a process will be put into place to review the current list of essential services designations. The process will have reasonable specific time periods determined in consultation with the applicable bargaining agent. The process will allow bargaining agents to dispute positions on the current list. The parties would then negotiate in order to resolve as many disputed positions as possible. The employer will consider the greater use of bundling as appropriate. The parties agree to refer any remaining disputed positions to a neutral third-party to make a final recommendation. The parties agree to accept the recommendations of the neutral third party. If a neutral third party cannot be agreed upon, the parties may apply to the Chair of the PSLREB, or their designate, to appoint a neutral third party with relevant essential services experience.
   • Separate agencies will be advised to follow the same measures for positions designated as essential within their organizations. The parties agree that the essential service designations will not be binding or precedent setting once the new legislation is passed.
   • In closing, I want to reiterate that the Government of Canada is committed to restoring fair and balanced labour laws that recognize the important role of unions in protecting the rights of workers.
7. 209. The Government informs that, on 28 November 2016, a legislation repealing Bill C-4, An Act to amend the Public Service Relations Act and other Acts (Bill C-34) was introduced in the House of Commons and was given first reading. The Bill is currently awaiting the second reading. The Government indicates that Bill C-34 amends the PSLRA to restore the procedures for the choice of process of dispute resolution including those involving essential services, arbitration, conciliation and alternative dispute resolution that existed before 13 December 2013. It also amends the Public Sector Equitable Compensation Act to restore the procedures applicable to arbitration and conciliation that existed before 13 December 2013. Finally, it repeals provisions of the Economic Action Plan 2013 Act, No. 2 that are not in force and that amend the PSLRA, the Canadian Human Rights Act, and the Public Service Employment Act and it repeals not in force provisions of the Economic Action Plan 2014 Act, No. 1 that amend those provisions.
8. 210. The Government requests that the complaints continue to be held in abeyance while Bill C 5 and Bill C-34 make their way through the parliamentary process.

C. The Committee’s conclusions

1. 211. The Committee notes that both cases brought on behalf of the NJC bargaining agents involve allegations of restrictions on the right to strike and bargain collectively imposed through the amendments of the PSLRA by the omnibus budget implementation legislation entitled Economic Action Plan 2013 Act, No. 2 (Bill C-4) and the omnibus budget implementation legislation entitled Economic Action Plan 2015, No. 1 (Bill C-59).
2. 212. The Committee notes that the CLC submits that the impugned provisions of Bill C-4 amending the PSLRA undermine free collective bargaining and the right to strike by: (1) allowing improper essential service designations; (2) denying certain federal employees the right to strike and instead forcing them to use compulsory arbitration; (3) failing to provide certain essential federal employees with adequate guarantees to compensate for the prohibition on striking; and (4) statutorily prescribing the criteria that an arbitration board or the PIC may consider when making an arbitral award or conciliation report, thereby undermining and calling into question the appearance of impartiality of these bodies.
3. 213. The Committee further notes the allegation that through the second statutory act (Bill C-59), the Government allowed the employer to remove, amend and unilaterally impose terms and conditions of employment related to sick leave and disability insurance that were formerly freely negotiated through collective bargaining.
4. 214. The Committee notes that the CLC and PSI, complainants in these cases, allege that the Government failed to effectively and adequately consult with workers organizations about Bill C-4 and Bill C-59 despite the fact that both pieces of legislation significantly affected their interests and rights.
5. 215. The Committee notes that, in March 2014 and May 2015, the PSAC and PIPSK (NJC bargaining agents) filed separate applications with the Ontario Superior Court of Justice alleging that a number of the Bill C-4 amendments to the PSLRA were unconstitutional and violated section 2(d) of the Canadian Charter of Rights and Freedoms. In June 2015, the CAPE and PIPSC, jointly with ten other NJC bargaining agents, as well as the PSAC filed an application before the same Court alleging that the provisions of Bill C-59 relating to sick leave were unconstitutional.
6. 216. The Committee notes the Government’s indication that since both Bills received Royal Assent, on 12 December 2013 and 23 June 2015, respectively, a new Government was elected and that on 22 March 2016, the Government tabled the federal Budget 2016 “Growing the Middle Class” where it reconfirmed its commitment to respect the collective bargaining process and to negotiate in good faith with public service bargaining agents. The Government further refers to the January and June 2016 Treasury Board communications reconfirming once again that it intended to engage in consultation with public sector stakeholders to repeal the provisions introduced through Bill C-4 and Bill C 59. The Government further explains that Bill C-5, an Act to repeal Division 20 of Part 3 of the Economic Action Plan 2015 Act, No. 1, was introduced and first read in the House of Commons on 5 February 2016 and that, on 28 November 2016, a legislation repealing Bill C 4, An Act to amend the Public Service Relations Act and other Acts (Bill C 34) was introduced in the House of Commons and was given first reading.
7. 217. The Committee notes the Government’s indication that the PSAC and PIPSC adjourned their constitutional challenges to Bill C-4 and have undertaken to withdraw this litigation completely upon the coming into force of the repeal legislation. The Committee further understands from the publically available information that, as a result of the Government’s clear commitment in relation to Bill C-59, the PIPSC and its co-applicants in the Bill C-59 constitutional challenge and injunction motion have agreed to adjourn the hearing of the injunction motion indefinitely and to place the substantive case relating to the constitutionality of Division 20 of C-59 in abeyance pending such time as the offending legislation has been repealed.
8. 218. The Committee notes with interest the above legislative developments regarding Bill C-4 and Bill C-59 and encourages the Government to continue working towards bringing the legislation into conformity with the principles of freedom of association and promotion of the full development and utilization of collective bargaining machinery in full consultation with the social partners concerned.

The Committee’s recommendation

1. 219. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • The Committee encourages the Government to continue working towards bringing the legislation into conformity with the principles of freedom of association and promotion of the full development and utilization of collective bargaining machinery in full consultation with the social partners concerned.