Expenditure Restraint Act – Federal Court Deems Unconstitutional. Significant decision for public sector unions

In December 2008, Treasury Board decided to roll back a scheduled wage increase for members of the RCMP. Parliament subsequently enacted the Expenditure Restraint Act codifying the wage rollback.

An application for judicial review was filed alleging that the 2008 Treasury Board decision was unconstitutional and that the Expenditure Restraint Act was also unconstitutional to the extent it applied to the members of the RCMP.

On June 21, 2011, The Federal Court issued its decision and agreed that the Expenditure Restraint Act (and the 2008 Treasury Board decision) were unconstitutional.

In the written decision, the Federal Court concluded that the Treasury Board “refused to negotiate on a good faith basis” with the members of the RCMP (through their Pay Council), and that the unilateral cancellation of a previous agreement interfered with s. 2(d) of the Charter.”

The Federal Court went on to conclude that the decision was not justified under s. 1 of the Charter. The Court was particularly critical of the government’s justification for the legislation, stating that “the aim of providing leadership and showing restraint and respect for public money is quite abstract. It appears to be political in nature. In my opinion, this stated aim is not pressing and substantial.”

The Court also said that there was no rational connection between the wage limit and the other purpose (reducing upward pressure on wages), stating “a wage increase limit that applies to the entirety of the federal public service, covering employees who are neither blue nor white collar workers such as RCMP Members, is not rationally connected to the reduction of upward pressure on the private sector to increase wages which could lead to job losses.” The legislation was also not minimally impairing: the only justification for not consulting the Pay Council was lack of time, and the Court noted that the government had time to consult other unions — just not the Pay Council.