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Bill C-4: A Series of Retrograde Changes to Labour Relations in the Federal Public Service

By Alison McEwen, Christopher C. Rootham, Sean T. McGee on October 31, 2013

Table of Contents

*Click on the sections below to jump directly to them

Introduction

Method of Changes Being Introduced

Changes to Essential Services

Changes to Arbitration

Changes to the Public Interest Commission

Changes to Bargaining

Changes to Mandate of the Public Service Labour Relations Board

Grievance and Complaints Procedures

Changes to Time Limits

Changes to the Composition and Workload of the Public Services Relations Board

Changes to the Public Service Employment Act

Conclusion

 

Introduction

On October 22, 2013 the government introduced a budget implementation act (the "Act")1. Among several other provisions in the Act that have nothing to do with the 2013 budget are comprehensive changes to the labour and employment relations regime for federal public servants.

The current President of Treasury Board recently admitted that he cannot explain the consequences of these changes2. This short paper is designed to fill that gap.

Method of Changes Being Introduced

The last time that the federal government went about changing the labour relations and employment laws for federal public servants, there was a lengthy process of study, analysis and consultation. In the fall of 1999, the Secretary of the Treasury Board named John Fryer to chair an Advisory Committee on Labour Management Relations in the Federal Public Service. A nine-member Committee was appointed, including experienced managers, union officials and academics. This Advisory Committee produced two reports (a report identifying the issues in May 2000; and a final report with recommendations in June 2001). The government then created a Privy Council Task Force on Modernizing Human Resources Management. The government introduced the Public Service Modernization Act in 2003 following up on the recommendations of the Advisory Committee and the Task Force. There were about three and a half months of committee hearings in the House of Commons, and another three months of hearings in the Senate (at which many stakeholders made submissions), before the changes were passed by Parliament and became law after a period of between one and a half to two years of preparation for the transition.

This time, the government decided to slip fundamental changes into a budget implementation bill. There was no public consultation, no consultation with public service unions, no consultation with other employee organizations, and certainly no study prepared by a committee of neutral experts. The government published a review of the Public Service Modernization Act back in 2011. Almost none of the changes proposed in that review have been implanted in this bill3; and in fact, in many cases the bill accomplishes the opposite of what was recommended in 20114.

These changes were announced without any warning, and without any commitment to discuss, study, or consider any way to modify these proposed changes. Labour relations, even in the public sector, is based on mutual and good faith consultation about issues of importance to unions and the employer. The high-handed and arbitrary way in which these changes were announced bodes ill for labour relations in the public service more generally.

Changes to Essential Services

There are typically three ways to deal with strikes in the public service: a complete ban on strikes; complete freedom to strike; or a partial ban on strikes where employees who perform essential services cannot strike, but non-essential employees can strike. The federal public service uses the third model.

Under the existing essential services model, an essential service is a service that is, “necessary for the safety or security of the public or a segment of the public.”5 There is a three-step process to deal with essential services:

  1. The parties negotiate which services are “essential”.  If the parties cannot agree, then the Public Service Labour Relations Board (PSLRB) defines the “essential” service;
  2. The employer determines the level of the essential service that must be performed in the event of a strike; and
  3. The parties negotiate which specific positions perform essential services. If the parties cannot agree, the Board will again decide the issue. Finally, the Act specifically contemplates that the proportion of an employee’s duties may change during a strike (in other words, some employees must perform more essential services so that others may strike). 

The government now proposes to change that system, and replace it with a system where the employer can act unilaterally without any supervision by the PSLRB. The proposed changes are as follows:

  1. The definition of “essential service” has been repealed - from now on, an “essential service” is whatever the employer says it is;
  2. The employer has the exclusive right to designate positions that perform what it says are essential services;
  3. Those positions are designated if they perform essential services “in whole or in part”, and the “job bundling” provision during a strike is repealed;
  4. The employer will consult with the union after it has made its decision, and only for a period of 60 days. After this consultation the employer has another 30 days in which to change its mind and designate different essential positions. There is no requirement of “good faith” consultation - just of consultation.

The proposed legislation also sets some time limits on when the employer must designate positions. The designation must be completed three months before the date on which either side may give notice to bargain.

These changes to the essential service regime will have the effect of meaning that a larger number of public servants cannot exercise their right to strike. The employer can designate whomever it likes, without reference to any definition of what constitutes an essential service. The employer could; if it felt like it; declare that every public service is essential, and ban strikes completely. More likely, the employer will designate just under 80% of employees, which will mean (as described further below) that the union cannot proceed to arbitration either. Their only recourse will be to strike with just over 20% of their members; or in other words, a strike without any impact.

These changes are similar to those put in place by the Saskatchewan government several years ago, which gave the employer certain unilateral powers (although even Saskatchewan did not go so far as to repeal the definition of essential service and leave the definition of essential service with the employer). The constitutionality of that legislation has been challenged by several public service unions in Saskatchewan, and the case is currently before the Supreme Court of Canada (“SCC”), likely scheduled to be heard sometime in the Spring of 2014.

Changes to Arbitration

Since 1967, public service unions have had the right to elect between strikes and arbitration as the final method to resolve bargaining disputes with the employer. There are various reasons why unions elect strike or arbitration. For one, an arbitration panel does not have the jurisdiction to order changes to certain terms and conditions of employment that impact management rights; whereas the parties could voluntarily agree to those changes after a strike. The union’s right to elect arbitration creates a level playing field, as its right is similar to Parliament’s ability to legislate an end a labour dispute and order arbitration instead.

The government has decided to change that rule. From this point forward, arbitration is only available when both the employer and bargaining agent agree. Given Parliament’s past willingness to legislate arbitration to end strikes, this amounts to arbitration whenever the employer agrees. The only time that a union has the ability to insist on arbitration is when over 80% of the bargaining unit has been designated as essential. Given the employer’s unilateral right to designate positions as essential, there is a real incentive for the employer to designate just under 80% of the positions in a bargaining unit as essential. In that case, the union cannot proceed to arbitration, but cannot run an effective strike with just under 80% of its members required to stay at work.

Not content with making sure that arbitration becomes less common, the government has gone on to change the rules of arbitration in its favour. The current Act lists five factors that must be taken into account; but all five factors are equal. The new Act will change that. It lists two factors that must not only be taken into account, but that the arbitration panel must “give preponderance” to. One of those factors is the same as an existing factor (the necessity of attracting and retaining public servants). The new Act however, adds a new factor, that being “Canada’s fiscal circumstances relative to its stated budgetary policies”. This means that arbitrators are no longer independent. Instead, they have to follow directions given to them in speeches or economic updates provided by the Minister of Finance. The new Act will then list four factors that “may” be taken into account. Those four factors are similar to existing factors, except they no longer refer to the “necessity” of, for example, retaining comparability between compensation between employees. Instead, these are “nice to have” factors. In short, the government has decided that arbitrators should follow instructions issued by the Minister of Finance instead of actually determining the result of a case on its merits.

The new Act makes three other changes to arbitration. First, an arbitration panel must provide reasons for decision, which has often, but not always, been the case. Second, the arbitration panel must consider all terms and conditions of employment when making its decision; including issues that cannot be collectively bargained, such as pensions. Third, if a party is not happy with the arbitration panel’s decision, they have seven days to ask the Chairperson of the PSLRB to review the decision. If the Chairperson thinks the decision is unreasonable, he or she can direct the arbitration panel to reconsider the decision.

Changes to the Public Interest Commission

The new amendments allow for the parties to jointly recommend the name of a person to act as a member of the Public Interest Commission (PIC) to the Chairperson. Upon receiving this name from the Chairperson, the Minister will then appoint that person. Previously, the Minister would appoint a person out of a recommended list of people jointly submitted.

In terms of the substance of the PIC’s decision, the new Act changes the mandate or jurisdiction of the PIC to match the mandate of an arbitration panel as described above. This includes the requirement that the PIC consider Canada’s fiscal circumstances relative to its stated budgetary policies.

These changes may be a result of the recent controversial PIC report concerning Border Service Officers (“BSO”), in which the PIC recommended settlement on terms somewhat more favourable to the BSOs than those contained in the Employer’s final offer6. The proposed amendments to the conciliation process require that the PIC looks at the government’s priorities before any of the public sector unions’ positions and submissions, creating an unbalanced bargaining table where bargaining rights follow the government’s fiscal priorities.

Changes to Bargaining

The new Act changes the period during which either party may serve a notice to bargain from 90 days prior to the expiry of the collective agreement to 12 months. This will hopefully correct the practice of collective agreements being completed years after the previous agreement expired. This practice is usually because the employer (when it is the Treasury Board) takes forever to produce the information required by both parties to bargain7, or because the Treasury Board takes forever to give a bargaining mandate to a separate employer8.

Changes to Mandate of the Public Service Labour Relations Board

The new Act removes two of the Board’s mandates: compensation analysis and research services. Accordingly, the current s. 16 of the PSLRA, outlining the Board’s role in compensation analysis and research services, is repealed, as is s. 53 of the PSLRA, which outlines the Advisory Board’s role to advise on matters of compensation analysis and research services.

Grievance and Complaints Procedures

The proposed amendments will limit public servants’ options for challenging government decisions, particularly when they say those decisions are discriminatory. The proposed amendments state explicitly that a public servant’s sole avenue for recourse under the Canadian Human Rights Act (“CHRA”) is to file a grievance. The proposed amendments do make one improvement beneficial to employees: grievances alleging a breach of the CHRA can now be referred to adjudication (unlike the current system, where there was some doubt about that ability). The time limits to file such a grievance are also extended to one year, bringing them in line with the time limits under the CHRA.

Until now, employees who were represented by a bargaining agent could file a grievance on their own as long as it did not say there was a violation of the collective agreement. They could do so regardless of whether they had the agreement of their bargaining agent. Now, except for human rights grievances, all grievances for unionized employees must have bargaining agent approval, and the public servant must be represented by the bargaining agent.

The proposed changes also create limits on policy grievances, so that the remedy for a policy grievance cannot have retroactive effect. In other words, the adjudicator or Board can only declare that the collective agreement was not being respected, and cannot order the employer to compensate employees for having interpreted the collective agreement incorrectly in the past.

Finally, the proposed amendments also make it clear that expenses of an adjudication will be shared by the bargaining agent and the employer. If the public servant is not represented by a bargaining agent, no costs are charged to the parties.

Changes to Time Limits

In the past, the Board had the discretion to provide an extension of a time limit. That discretion has been curtailed, and the Board may now only provide an extension of time “in circumstances that the Board considers to be exceptional”. While on the surface this may appear to be a significant change, in past the Board had proven itself to be reluctant to provide any extension of time limits. Therefore, the practical effects of this amendment may not be all that noticeable.

Changes to the Composition and Workload of the Public Services Relations Board

The budget implementation act proposes to abolish the existing Public Service Labour Relations Board and Public Service Staffing Tribunal and merge them into a single Public Service Labour Relations and Employment Board. There are a number of changes being made, but we wanted to comment on three of them.

First, the new Act changes the qualifications of PSLREB members so that appointees are no longer required to have any knowledge of labour relations. The Supreme Court of Canada has already concluded that appointing arbitrators who do not have broad acceptance in the labour relations community as a result of their experience or knowledge is unreasonable, so hopefully this legislative change will not permit the government to appoint unqualified or unknowledgeable board members9.

Second, the PSLREB has broader powers to dismiss complaints without a hearing. Instead of only dismissing frivolous or vexatious complaints, the Board can dismiss “trivial” or “bad faith” complaints.  Hopefully, this means that the Board has the power to dismiss “trivial” or “bad faith” jurisdictional objections made by the employer as well.

Third, the new Act is going to change the way that grievances are decided.  The current system is that a grievance is sent to the PSLRB who assigns an “Adjudicator” to hear the grievance. The “Adjudicator” is inevitably a member of the PSLRB (unless the parties agree to use somebody else). The new Act changes this, so that the PSLREB itself hears the grievance. In practice, this probably will have little impact because Board members almost always hear grievances in any event. The government however, must have had some reason for this change.

The proposed legislation makes other technical changes that are worth flagging without discussing in detail:

  • The PSLREB can create regional offices as necessary;
  • The PSLREB will be composed of one Chair, Two Vice-Chairs, up to ten other full-time members and as many part-time members as required. The old PSLRB had no statutory limits on its numbers. At this time, there are six full-time members of the PSLRB (plus a Chairperson and two Vice-Chairpersons), and also five full-time members of the Public Service Staffing Tribunal (“PSST”) (including the Chairperson and Vice-Chairperson). In short, the work of 14 people will now be done by no more than 13;
  • While the term of office for full-time members remains five years, the term for part-time members is capped at three years;
  • The position of Executive Director is no longer required by statute;
  • The default number of panel members is now one instead of three (which reflects the actual practice of the Board);
  • There are various transitional measures dealing with complaints and grievances yet to be decided, including a provision that all members of the old Board will cease to hold office on the day the law comes into effect.

Changes to the Public Service Employment Act

The new Act makes three important changes to the Public Service Employment Act (PSEA).

First, in the old PSEA, when a Deputy Head was laying off some, but not all, of the employees in part of their organization, the layoffs were to be done in accordance with the Commission’s regulations. The amendments under the Act add the additional requirement that if some, but not all, employees who occupy positions at the same group and level and perform similar duties are to be laid off, then they must be laid off in accordance with the Commission’s regulations. The ability to make a complaint to the Tribunal regarding these layoffs in s. 65(1) is also restricted by the same additional requirement of “same group and similar duties”.At first glance this amendment appears to be an attempt to overrule a recent PSST decision on this point where the Public Service Commission (PSC) and the department both unsuccessfully argued for an interpretation of the current s. 65 of the PSEA that would match the proposed amendment10.

Second, changes were made to the criteria regarding who is allowed to make a complaint regarding the internal appointment process. Under the old PSEA, any unsuccessful candidate in the area of selection determined under s. 34 in an advertised internal appointment process could bring a complaint. Under the new Act, there is the additional requirement that the complainant has been determined by the Commission to meet the essential qualifications for the work to be performed. Candidates who did not meet the essential qualifications or the asset qualifications, may make a different complaint to the Board that there was an abuse of authority in assessing the qualifications, or that the complainant was not assessed in the official language of their choice.

Third, the proposed changes also limit the right to complain if there are problems in the staffing process. Public Servants will only be entitled to complain about their own assessment if they feel they were wrongly deprived of a job. This adds to a system that severely limited the ability of public servants to challenge staffing actions that are wrong, inappropriate, not based on merit, or suffer from other flaws. In respect of layoffs, employees can now only file complaints where more than one employee is to be laid off. They also can’t complain about mistakes or inappropriate decisions that led to others being wrongly found qualified; just about themselves.

There are also changes to the PSEA to clarify the ability to address human rights issues in staffing complaints and giving the PSST (and eventually the PSLREB) greater power to summarily dismiss complaints on procedural grounds or if the Deputy Head has already taken appropriate corrective action.

Conclusion

This was just a short summary of the changes being proposed in Bill C-4. These changes; with some small exceptions; are deliberately targeted at public servants and the unions who represent them. Make no mistake: this legislation makes for bad labour relations, both in its content and in the way it has been developed.


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