In a landmark decision widely heralded as one of the greatest victories of the labour movement in recent memory, the Supreme Court of Canada held on June 8, 2007 that collective bargaining is a fundamental right protected by the Canadian Charter of Rights and Freedoms’ (the “Charter”) guarantee of freedom of association. It also ruled that certain provisions of the BC Liberal government’s Health and Social Services Delivery Improvement Act (the “Act”) violate that right.

The demand for health care and the cost of providing needed health care services in BC has been increasing significantly for some time. As a result, the government sought legislative means to reduce costs and to facilitate the efficient management of the workforce in the health care sector, and in 2002, passed the Act . The Act included a number of changes which in some cases invalidated important provisions of collective agreements then in force, and effectively precluded meaningful collective bargaining on a number of specific issues. As a result, a group of unions and individuals affected by the Act (the “Appellants”) challenged the constitutionality of the Act’s changes to transfers and multi-worksite assignment rights, contracting out, the status of employees under contracting-out arrangements, job security programs, and layoffs and bumping rights.

The Appellants argued that the Act violated several constitutional rights guaranteed under the Charter, namely freedom of association (s. 2(d)), life, liberty and security of the person, and equality. The BC Supreme Court and the Court of Appeal upheld the constitutionality of the Act, concluding that a right to collective bargaining was not protected under the Charter’s guarantee of freedom of association.

However, effectively overruling 20 years of its own jurisprudence, the Supreme Court of Canada concluded that s. 2(d) of the Charter protects the capacity of members of labour unions to engage in collective bargaining on fundamental workplace issues, and that the state 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. To constitute “substantial interference” with freedom of association, the intent or effect must seriously undercut or undermine the activity of workers joining together to pursue the common goals of negotiating workplace conditions and terms of employment with their employer. Laws or actions that can be characterized as “union breaking” meet this requirement, as do less dramatic interference with the collective process such as denying a union access to labour laws, acts of bad faith, and unilateral nullification of negotiated terms without any process of meaningful discussion and consultation.

Applying the law to the facts, the Supreme Court of Canada concluded that certain provisions of the Act (but not all) were unconstitutional because they infringed the right to collectively bargain. The Court held that the Act’s amendments to the contracting out, layoff and bumping rights provisions infringed the right to bargain collectively because they deal with matters central to freedom of association, amount to substantial interference with associational activities and do not preserve the processes of collective bargaining. Although the government was facing a situation of exigency, the Court concluded that the measures it adopted constituted a virtual denial of the s. 2(d) right to a process of good faith, bargaining, and consultation. However, the Court held that the Act’s provisions dealing with transfers and reassignment of employees were concerned with relatively minor modifications to in-place schemes, that significant protections remained in place and that while the Act removed these issues from future bargaining, this did not amount to a substantial interference so as to attract s. 2(d) Charter protection.

The Court also held that the s. 2(d) infringements arising from the government’s modifications to contracting out, layoffs and bumping rights were not justified under s. (1) of the Charter because the government could not demonstrate that the Act minimally impaired employees’ right to bargain collectively. The Court was critical of the government for its failure to consider whether it could reach its goal by less intrusive measures, and its lack of consultation with unions on the matter.

The Court suspended its declaration for 12 months. Understandably, unions have characterized the Supreme Court’s decision as a huge victory, both for health care workers and for unions more generally. Union spokespeople and union counsel predict that the decision will change the landscape of collective bargaining for every union across the country and significantly limit government from disregarding collective agreements. Others question whether the ruling will be interpreted as broadly, particularly since the Charter only applies to legislation and government action. Thus, while in the future challenges may be brought to various forms of back-to-work and wage control legislation, as well as to labour codes, the significance of the finding that collective bargaining is a Charter right, particularly in private sector bargaining, remains to be seen.