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The Federal Court has recently upheld a decision of an Adjudicator that the Federal Government must establish an alternation system or establish systems and processes to facilitate "alternation" opportunities for employees who are about to be laid off.

Alternation is a common way to alleviate the impact of layoffs in the federal public service. It is a process by which an employee who has been identified for possible lay-off ("the opting employee") agrees to change places with a similarly qualified employee who has not been so identified ("the alternate"). The advantages of alternation to employees are obvious: the opting employee continues his or her career in the same way as if he or she had simply been transferred to another position, and the alternate receives a financial incentive for vacating the position. In principle, an alternation imposes no additional costs on the employer, while not detracting from its objective of reducing the size of its workforce.

Bargaining agents representing Federal public servants in the "core public administration" – departments whose labour relations are controlled directly by Treasury Board – negotiated the Work Force Adjustment Agreement (sometimes referred to as the Work Force Adjustment Appendix or "WFAA") to provide benefits to employees who are "affected" by pending layoffs. However, despite the obvious benefits of alternation, not every department established procedures to implement alternation, and two bargaining agents filed grievances seeking a ruling on whether the Treasury Board was required to set up an alternation system in every department.

The Adjudicator assigned to hear that grievance agreed that the Treasury Board was so obligated. The WFAA requires the establishment of systems that "…facilitate redeployment or retraining of…affected employees, surplus employees, and laid-off persons." The Adjudicator concluded that "the word 'redeployment', while not a synonym for 'alternation,' is apt to describe part of an alternation", therefore, the WFAA obliges the Treasury Board to facilitate the switching of positions for employees who opt to do so.

The government applied for judicial review of the Adjudicator's decision. In a July decision of the Federal Court, Canada (Attorney General) v. Public Alliance of Canada, Justice Strickland dismissed the government's application for judicial review. In its application, the government relied solely upon a new argument it had not raised in front of the Adjudicator. The government noted that while the WFAA article relied upon by the Adjudicator requires redeployment of "affected employees" who have been informed that their services may no longer be required. Alternation, on the other hand, only impacts "opting employees" who have been affected and are now within a 120-day period to elect the sort of benefits under the WFAA that they want. Therefore, it argued that an "affected employee" does not include an "opting employee", and that the provision relied upon by the Adjudicator does not apply to an "opting employee."

Justice Strickland permitted the government to raise this new argument, but then dismissed it. She concluded that the Adjudicator reasonably read the single article of the WFAA in the context of the purpose of the entire WFAA, which is to "maximize employment opportunities for indeterminate employees "affected by" workforce adjustment situations, primarily through ensuring that, wherever possible, alternative employment opportunities are provided to them." She concluded that the Adjudicator did not err by extending "redeployment" opportunities to "opting employees" instead of limiting those opportunities to "affected" employees.

This case demonstrates the necessity of reading an entire agreement when interpreting a single provision in that agreement. Clauses in a collective agreement (or a side-agreement incorporated into the collective agreement) should not be read in isolation. A clause should be read in the context of the purpose of the collective agreement as a whole. While not at issue in the Federal Court, this case is also important in that it shows that the Treasury Board, as the "employer", cannot shelter behind decisions made by individual departments. If the Treasury Board agrees to something in bargaining, it is responsible for ensuring that departments implement that agreement. This decision is a significant victory for public servants, and ensures that departments need to help public servants protect themselves against the impact of government layoffs.


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This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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