Definitive Report - Report No 234, June 1984

Case No 1173 (Canada) - Complaint date: 29-DEC-82 - Closed

1. 75. The Committee already examined this case at its November 1983 meeting when it presented interim conclusions to the Governing Body in its 230th Report, paragraphs 551 to 578 (approved by the Governing Body at its 224th Session, November 1983). The Government sent its observations on 17 April 1984.
2. 76. 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 Barganing Convention, 1949 (No. 98) or the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. Previous examination of the case

1. 77. The issue outstanding after the previous examination of this case concerns allegations received in communications from the World Confederation of Organisations of the Teaching Profession (WCOTP) dated 25 August and 31 October 1983. The WCOTP alleges that three pieces of British Columbian legislation - Bill 3 (the Public Sector Restraint Act), Bill 11 (amending the Compensation Stabilisation Act), and Bill 26 (amending the Employment Standards Act) - appear to have the objective of putting an end to the possibility of collective bargaining by public servants in general and teachers in particular. According to the WCOTP, Bill 3 empowers the employer, with unfettered discretion and without appeal, to dismiss employees for a wide range of economic reasons; where the existing collective agreements provide for due process, that provision remains valid only until the original intended date of expiry of the agreement even if the agreement as a whole is unilaterally extended by other government measures. Bill. 3 also automatically designates school principals, vice-principals and other supervisory personnel as persons whose salaries will be unilaterally fixed by the Cabinet, the result being that the Lieutenant Governor-in-Council can fix their salaries, classification and terms of employment rather than the parties involved through collective bargaining. Bill 11 makes permanent the controls on collective bargaining, which were introduced in 1982 as an emergency measure for a two-year period, and adds further controls on collective bargaining, such as the concept of the public sector employers' "ability to pay" which the complainant views as particularly dangerous in view of Bill 6, the Intermediate Education Finance Act (in force until 31 December 1986), under which the Government gives itself the power to control the ability to pay of the teachers' employers, namely the school boards. The WCOTP also alleges that Bill 11 empowers a government-appointed Commissioner to limit increases in, maintain or reduce, compensation in the public sector in accordance with regulations issued by the Government at its pleasure. Lastly, the complainant refers to Bill 26, amending the Employment Standards Act in such a way that where a collective agreement makes any provision regarding one of the number of matters listed in the Bill (e.g. hours of work, vacation, etc.), all the provisions of the Act regarding that matter - including those more favourable legislative provisions - are rendered invalid. Accordingly, states the complainant, in the British Columbian teachers' bargaining situation, if the employees manage to gain incomplete contractual conditions supplementary to the minimum standards contained in the Employment Standards Act, they risk losing even that minimum protection for all aspects of the negotiated item.

B. The Government's reply

1. 78. In its communication of 17 April 1984, the Government states that Bill 3 (which became law on 26 October 1983) was substantially amended before its passage to make explicit provision for appeal, due process and fairness of treatment, and it includes an option for groups of public sector employees to negotiate an exemption from the, termination provisions of the Act. According to the Government, this exemption provision has been widely and successfully embraced. Regarding the allegation that Bill 3 designates certain school employees as "senior managers" and gives the Minister the power to adjust their compensation, the Government explains that this was not done to truncate the bargaining unit, but rather to allow for the compensation of these senior officials to be made more consistent across the province. At the moment, continues the Government, there is a great deal of variance, a situation which is unfair to all concerned. The Government stresses that the Minister has not yet exercised this power and may never do so and that no regulations relevant to this part of Bill 3 have been published.
2. 79. With respect to the allegations regarding Bill 6 (which also became law on 26 October 1983), the Government explains that the final version of that legislation removes the power to control portions of the school district budgets.
3. 80. Regarding Bill 11 (which became law on 21 October 1983 but with retroactive effect to 7 July 1983), the Government states that the main purpose of the compensation stabilisation programme is to ensure that compensation rates remain within the province's ability to pay. It is the Government's responsibility to determine what the province can afford and to set its fiscal policies and budget accordingly.
4. 81. With respect to the allegations regarding Bill 26, the Government states that, during passage, amendments were introduced to make it clear that nothing in the Act affects the powers and duties of the Labour Relations Board or impinges upon collective agreements.

C. The Committee's conclusions

1. 82. The Committee notes the Government's reply concerning Bill 3 and, in particular, that under section 2(1), a public sector employer may terminate the employment of an employee where it is considered that there is insufficient work or insufficient current operating funds budgeted to maintain current levels of employment, or where a change is made in the organisational structure of the employer, or where the employer discontinues the programme, activity or service or reduces the level of an activity or service. In particular, the Committee notes that under section 7(1), the Lieutenant Governor-in-Council shall appoint members to a review panel, whose decision may, under section 9, be submitted for judicial review, the courts being empowered to order that the employee be reinstated with compensation. The Committee would generally point out in this connection, as it has in the past [see 202nd Report, Case No. 932 (Greece), paragraph 392; 207th Report, Case No. 823 (Chile), paragraph 181], that while the appropriateness of dismissing workers for economic reasons obviously does not come within its sphere of competence, it nevertheless considers it appropriate to reiterate the importance of effective protection against dismissals for trade union reasons and that this protection must particularly extend to trade union leaders; it points out that, as far as cases of dismissals for economic reasons are concerned, acts of anti-trade union discrimination ought not to occur under the pretext of such circumstances. In addition, the Committee notes in this connection the comments made by the Committee of Experts on the Application of Conventions and Recommendations in its 1984 observation on Convention No. 111 to the effect that the circumstances justifying dismissal under section 2(1) are so widely defined that the mere enforcement of the Act before the courts would not appear to offer substantial protection against discrimination in employment.
2. 83. As regards the allegation that section 10 of Bill 3 entitles the Government to fix the conditions of service of "senior managers" who are defined to include principals, vice-principals or teachers holding supervisory positions, or employees holding a position that is designated by the Compensation Stabilisation Commissioner to be a senior management position, the Committee would point out that such a measure would have the effect of preventing these workers from negotiating and determining their terms and conditions of employment through the process of collective bargaining, thereby depriving them of one of the principal means at the disposal of workers and their organisations to further the interests of their members and organise their activities (Articles 10 and 3 of Convention No. 87). The Committee would also recall that only public servants engaged in the administration of the State can be excluded from the collective bargaining process [see, for example, 143rd Report, Case No. 764 (Colombia), para. 87.] In the present case the Committee takes particular note of the Government's statement that the Minister responsible has not yet exercised his powers under section 10 and may never do so and that no regulations in this connection have been published.
3. 84. As regards the allegation that Bill 11, when read together with the wide powers given under Bill 6 to the Minister to issue directives to establish school budgets and to direct the Board of School Trustees not to expend in excess of the amount of its budget, introduces permanent controls on public servant collective bargaining, the Committee notes that section 12.] of Bill 11 states that paramount consideration shall be given to the ability of the public sector employer to pay. In this respect, the Committee takes note of the Government's statement that it is its responsibility to determine what the province can afford and set its fiscal policies and budget accordingly.
4. 85. The principal sections of Bill 11 read as follows:
   • Section 4(1)(g). The Compensation Stabilisation Commissioner shall ... determine whether section 12.] has not been complied with.
   • Section 9(1). The Executive Council shall issue compensation stabilisation guide-lines to restrain and stabilise the compensation plans of the public sector employers and public sector employees. (2) The guide-lines may include, but are not limited to, provisions specifying in respect of whom, when and in what manner (a) compensation will be maintained or reduced, or (b) increases in compensation will be limited.
   • Section 11. The Commissioner may, on his own motion or on the request of a public sector employer, public sector employee or representative of either of them, direct the mediator [appointed under section 71 to provide mediation or fact-finding services to assist the employer, employee or representative to reach or establish a compensation plan in accordance with the requirements of this Act.
   • Section 12.1. In reaching or establishing a compensation plan for public sector employees, the parties to the plan or the public sector employer or arbitrator establishing the plan, shall give paramount consideration to the ability of the public sector employer to pay that compensation.
   • Section 14. The Commissioner shall review all compensation plans filed [employers are so required under section 131 and determine whether the plans are within the guide-lines.
   • Section 15. Where the Commissioner has determined that a compensation plan is outside the guide-lines, he (a) shall notify the public sector employer and any other person the Commissioner considers appropriate, (b) may notify the public sector employer and any other person the Commissioner considers appropriate of the maximum allowable compensation which the Commissioner considers is within the guide-lines for that compensation plan, and (c) shall provide the parties to the compensation plan ... with an opportunity to reach or establish a plan that is within the guide-lines.
   • Section 16. Notwithstanding section 15, where the Commissioner has determined that a compensation plan is outside the guide-lines, the Commissioner may, on his own motion or on the request of the party to the plan, order that the plan is subject to Part 3.
   • Section 17(1). The Lieutenant Governor-in-Council may make regulations respecting the restraint and stabilisation of compensation of public sector employees. (2) ... The Lieutenant Governor-in-Council may make regulations (a) ... requiring reductions in compensation, (c) authorising the Commissioner to establish a group of public sector employees for purposes of application of the regulation under paragraph (a) ...
   • Section 20. The Commissioner shall review a compensation plan that is subject to this part [Part 31 and determine whether the plan is within the compensation regulations.
   • Section 21. Where the Commissioner has determined that a compensation plan is outside the compensation regulations, he shall ... (b) notify the public sector employer and any other person the Commissioner considers appropriate of the maximum allowable compensation that the Commissioner considers is within the compensation regulations for that compensation plan, and (c) provide the parties to the compensation plan with an opportunity to reach or establish a plan that is within the compensation regulations.
   • Section 22(l). Notwithstanding section 21, where the Commissioner determines that a compensation plan is outside the compensation regulations ... the Commissioner may make an order prohibiting, in the manner he specifies, the public sector employer from implementing a compensation plan that is outside the compensation regulations, requiring a public sector employee to pay back to the employer any compensation that is outside the compensation regulations ...
   • Section 24.1. A decision or order made by the Commissioner is final and binding.
   • Section 25(1). The Commissioner may file in the Supreme Court a copy of a decision or order made by him as if it were an order of the court. (2) An order or decision filed under this section shall be deemed for all purposes to be an enforceable order of the Supreme Court but no appeal may be taken from that order.
5. 86. After a thorough examination of the Act, the Committee would recall, with particular reference to sections 17 and 25, that the requirement of ministerial approval before a collective agreement can come into force is not in conformity with the principles of voluntary collective bargaining laid down in Convention No. 98. However, objections by the Committee to the requirement that prior approval of collective agreements be obtained from the Government do not signify that ways could not be found of persuading the parties to collective bargaining to have regard voluntarily in their negotiations to considerations relating to the economic or social policy of the Government and the safeguarding of the general interest. To achieve this, it is necessary, first of all, that the objectives to be recognised as being in the general interest should have been widely, discussed by all parties on a national scale in accordance with the, principle laid down by the Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113). The Committee has also recognised in the past [see, for example, 187th Report, Case No. 874 (Spain), paragraph 482; 208th Report, Case No. 1007 (Nicaragua), paragraph 3891 that it might be possible to envisage a procedure whereby the attention of the parties could be drawn, in certain cases,: to the considerations of general interest which might require further examination of the terms of agreement on their part, however persuasion is always to be referred to constraint. In this connection, in the present case, the Committee observes that if the guide-lines made by the Government under section 9 are found by the Commissioner to be overstepped in a collective agreement, the collective agreement may be referred under section 16 to the direct control of government regulations made under section 17, any non-observance of which can be overruled by an order of the Commissioner which has the possibility of being enforced in the same manner as a Supreme Court order. The guide-lines accordingly are not of a persuasive nature and, in addition, it is not clear from the information before the Committee whether, during the adoption of Bill 11, they were recognised as being in the general interest as is required by the above-mentioned principles.
6. 87. Moreover, the Committee had occasion during its previous examination of this case to examine legislation enabling the Government to block through its budget wage increases which had been previously agreed by the parties to the negotiations [see 230th Report, paragraph 573]. In the present examination of the case, the Committee can only endorse its previous conclusion that such action is not consistent with the principles of freedom of association. The Committee has stressed in the past [see, for example, 211th Report, Case No. 1052 (Panama), paragraph 155] the importance it attaches to the principle of the autonomy of the parties to the collective bargaining process, a principle generally recognised in the r preparatory discussions that led to the adoption by the International Labour Conference in 1981 of the Collective Bargaining Convention (No. 154). It follows from this that the public authorities should not, as a rule, intervene in order to modify the contents of collective agreements which have been freely concluded. The Committee would also recall that the exercise of financial powers in a manner that prevents compliance with collective agreements entered into by public bodies is not consistent with the principle of free collective bargaining. It would repeat its conclusions reached in paragraph 575 of its previous examination of the case, when it noted that, under the Government's compensation stabilisation programme, freely concluded collective agreements or awards are translated into so-called compensation plans which must be submitted for review to the Commissioner responsible for the programme, that this is a discouragement to the use of voluntary collective bargaining [see 176th Report, Case No. 823 (Chile), paragraph 23] and that, even where the intervention by the public authorities is essentially for the purpose of ensuring that the negotiating parties subordinate their interests to the economic policy pursued by the Government, irrespective of whether they agree with that policy or not, it is incompatible with the principle of non-interference by the public authorities in the free functioning of workers' organisations [see, for example, 65th Report, Case No. 266 (Portugal), paragraph 70]. In view of the fact that Bill 11 has been promulgated without limit of time, and of the adverse consequences thereof for free collective bargaining for public employees in British Columbia, the Committee trusts that the parties to an agreement that is unacceptable to the, Government because of the financial implications it involves will be able to arrive at equitable and freely negotiated agreements which will be respected by the Government.
7. 88. Lastly, as regards the complainant's allegation that section 2(2) of Bill 26, by rendering inapplicable the relevant provisions of the Employment Standards Act concerning hours of work, vacation, maternity leave and lay-off when they are referred to in a collective agreement, endangers minimum standards, the Committee notes the Government's reply to the effect that the final passage of this Act contained amendments ensuring that nothing in the Act affects the powers and duties of the Labour Relations Board or impinges upon collective agreements. Section 2 now reads as follows:
8. (1) Subject to subsection 2, a requirement of or made under this Act is a minimum requirement, and an agreement to waive such a requirement not being an agreement referred to in subsection 2 is void.
9. (2) Where a collective agreement contains any provision, respecting a matter set out in column 1 [hours of work and overtime, annual vacation or vacation pay, termination of employment or lay-off and maternity or pregnancy leave, the corresponding] Part of this Act ... does not apply in respect of employment pursuant to that collective agreement.
10. (3) Where a collective agreement contains no provision respecting [one of these matters, the corresponding] Part of this Act shall be deemed to be incorporated in the collective agreement as part of its terms.
11. 89. The Committee observes that the previous wording of section 2 (a requirement prescribed by/or under this Act is a minimum requirement and, subject to this Act, the regulations and lawful orders of the Director, an agreement to waive a requirement is void) ensured certain minimum standards in the areas affected. The Committee notes the complainant's argument that the amendment to the Employment Standards Act gives an incentive to the employer either to refuse to negotiate the conditions of employment mentioned in the Act or to insist at the negotiating table on standards inferior to those provided for in the Act in the knowledge that more favourable protection will not be able to be enforced by statute, but having no more detailed information at its disposal concerning the practical consequences of this provision, it considers that it cannot reach any conclusion on this aspect of the case.
12. 90. The Committee would refer the various legislative aspects raised in this case to the Committee of Experts on the Application of Conventions and Recommendations.

The Committee's recommendations

• The recommendations of the Committee
  91. 91 In these circumstances, the Committee recommends the Governing Body to approve this report and, in particular, the following conclusions:
      • (a) In relation to the wide ambit of circumstances justifying termination of employment under section 2(l) of Bill 3, the Committee notes that judicial review is provided for but would recall that economic reasons should not be used as a pretext for dismissal based on anti-union grounds.
      • (b) As regards the wide definition of "senior managers" under section 10 of Bill 3 whose terms and conditions of employment are fixed by the Government, the Committee recalls that only public servants engaged in the administration of the State can be excluded from the collective bargaining process.
      • (c) As regards the "ability to pay" concept introduced by section 12.] of Bill 11 and the requirement to submit collective agreements for a review (under sections 14 and 20) of their observance of government guide-lines or regulations (issued under sections 9 and 17) the Committee:
      • (i) considers that the use of financial powers to block fulfilment of previously negotiated collective agreements is not consistent with the principles of freedom of association and that a review of previously agreed collective agreements is a discouragement to the use of voluntary collective bargaining;
      • (ii) trusts that the parties to an agreement that is unacceptable to the Government because of the financial implications it involves will be able to arrive at equitable agreements which will be respected by the Government.
      • (d) The Committee considers that the allegation that section 2(2) of Bill 26 withdraws the right to rely on the minimum standards set out in the Employment Standards Act regarding hours of work,: vacation, maternity leave and lay-off does not call for further examination.
      • (e) The Committee refers the various legislative aspects raised in this case to the Committee of Experts on the Application of Conventions and Recommendations.