Collective Bargaining in the Federal Public Service

• Author: Christopher Rootham
• Pages: 220-318

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Collective Bargaining in the Federal

Public Service

A. INTRODUCTION

This chapter concerns the process of industrial dispute resolution in the

federal public service — namely, collective bargaining, conciliation and

strikes, and interest arbitration. Before beginning a discussion of the

technical and legal details of industrial dispute resolution in the federal

public service, it is worthwhile to examine the historical, political, and

economic context of bargaining in the federal public service.

Collective bargaining in the public sector is qualitatively dierent

than in the private sector. The most important factor distinguishing

public sector collective bargaining from the private sector is politics.

Collective bargaining in the public sector involves an eort to engage in

political decision-making.1 Governments, unlike private sector employ-

ers, focus primarily on public opinion and the likelihood of re-election

rather than on prof‌it maximization. This is particularly so at the federal

level of government, where the tax base is broader and more f‌lexible

than at the provincial or municipal level; in addition, wages and salaries

of the federal government account for a smaller share of the budget than

in provincial or municipal governments.2 Likewise, public service unions

1 See, for example, British Columbia Teachers’ Federation v British Columbia Pub-

lic School Employers’ Assn, 2009 BCCA 39 at para 37: “Unlike the private sector,

the primary target of the strike weapon is the government and public opinion;

the strike is in that sense political.”

2 Personnel expenses account for 40 percent of federal direct program spending,

or $48.6 billion in 2016–17. This includes a combination of current and future

Collective Bargaining in the Federal Public Service | 221

use the strike weapon to create public pressure on governments rather

than to penalize their employer f‌inancially. Public service strikes do not

cost governments revenue and, on the contrary, can actually assist their

f‌inancial situation since they do not need to pay their employees who

are on strike.3 It has been suggested that political pressures on the public

employer act as a substitute for the economic pressures to settle in the

private sector bargaining model. There are, however, countervailing

political pressures. The employer may be concerned about high wage

settlements setting a precedent for private sector wage settlements or for

other levels of government. This was one of the expressed purposes of

the 1982 Public Sector Compensation Restraint Act4 and the Expendi-

ture Restraint Act.5 While some public service unions have achieved

higher-than-average settlements, a government cannot be expected to

settle at any price.6

As a result, public sector labour relations outcomes are the prod-

uct of both economics and politics. Because of this political dimen-

sion to collective bargaining in the public sector, some commentators

have gone so far as to contend that public sector collective bargaining

is inherently antidemocratic. As Malin stated, those critics “suggest

that all issues discussed at the bargaining table are political issues that

should be decided in the regular political process, and they consider it

expenditures: Oce of the Parliamentary Budget Ocer, Federal Personnel Spend-

ing: Past and Future Trends (20 March 2018) at 1, online (pdf): www.pbo-dpb.gc.ca/

web/default/f‌iles/Documents/Reports/2018/Fed%20Personnel%20Spending/

Fed_Personnel_Spending_EN.pdf. By contrast, and just to provide one example,

Ontario’s personnel expenses account for approximately 48 percent of direct pro-

gram spending: Ontario, “Expenditure Estimates Volume1 (2018–19),” Summary

Table 3 (23 April 2018), online: www.ontario.ca/page/expenditure-estimates-

volume-1-table-contents-2018-19. The City of Ottawa, to pick one municipal

example, spends approximately 46 percent of its expenditures on compensation:

“City of Ottawa 2019 Operating Budget,” online: https://ottawa.ca/en/city-hall/

budget/previous-budgets/budget-2019#2019-adopted-budget.

3 Jacob Finkelman & Shirley Goldenberg, Collective Bargaining in the Public Ser-

vice: The Federal Experience in Canada (Ottawa: Institute for Research on Public

Policy, 1983) at 256–58.

4 Ibid, discussing the Public Sector Compensation Restraint Act, SC 1980–81–82–83,

c 122.

5 Meredith v Canada (Attorney General), 2015 SCC 2 at para 64.

6 Gene Swimmer, “Public-Sector Labour Relations in an Era of Restraint and

Restructuring: An Overview” in Gene Swimmer, ed, Public-Sector Labour Rela-

tions in an Era of Restraint and Restructuring (Toronto: Oxford University Press,

2001) at 2–3.

222 | LABOUR AND EMPLOYMENT LAW IN THE FEDERAL PUBLIC SERVICE

inappropriate to give unions, which they regard as one of many interest

groups, an avenue of access to public decision makers that is not avail-

able to other interest groups.”7

There are several rebuttals advanced against this argument. First,

Malin herself argued that such concerns are misplaced because collect-

ive bargaining does not eliminate the inf‌luence of other interest groups,

and collective bargaining helps even out a power imbalance that inher-

ently favours interest groups other than trade unions:

Concerns that public sector collective bargaining undermines

democratic government are misplaced. When matters are not sub-

ject to collective bargaining, they are determined unilaterally by the

employer after input from various interest groups. Labeling a matter

a mandatory subject of collective bargaining does not eliminate the

access of other interest groups to the public decision maker. The duty

to bargain requires negotiation but does not compel the employer to

reach agreement with the union. Public ocials remain accountable

to the public for the agreements they reach, or fail to reach, with their

employees’ unions.

As users and consumers the public desires more and better ser-

vices at lower costs. Labor costs are the largest part of most public-

entity budgets. Consequently, unions seeking wage increases and other

concessions that would raise labor costs are at a disadvantage vis-

à-vis every other interest group in the budget-setting process. That

disadvantage justif‌ies providing them with collective bargaining as a

special avenue of access.8

As Malin put it more bluntly in a later paper, “when employees’ wages

and working conditions are left to be decided in the political process,

employees and their unions are inherently outnumbered by members

of the public who as users and purchasers of the employees’ services,

desire greater and better services at the lowest possible cost.”9

7 M. Malin, “Public Sector Labor Law Doctrine and Labor-Management Cooper-

ation” in J. Brock & D. Lipsky, eds, Going Public: The Role of Labor-Management

Relations in Delivering Quality Government Services (Champaign, IL: Industrial

Relations Research Association Series, 2003) at 281. See also M. Malin, “The

Paradox of Public Sector Labor Law” (2009) 84 Ind LJ 1369 at 1372.

8 Ibid at 282.

9 M. Malin, “The Motive Power in Public Sector Collective Bargaining” (2018) 36

Hofstra Lab & Empl LJ 123 at 156.