Court of Appeal File No. CA041558 Supreme Court File No. S-124584

Vancouver Registry COURT OF APPEAL

REDACTED PURSUANT TO THE ORDER OF MR. JUSTICE HARRIS, PRONOUNCED MARCH 13, 2014

FOR PUBLIC USE Between

British Columbia Teachers' Federation on behalf of all Members of the British Columbia Teachers' Federation

Respondent

(Plaintiff) and

Her Majesty the Queen in right of the Province of British Columbia

Appellant (Defendant)

- and Court of Appeal File No. CA041560

Supreme Court File No. L021662 Vancouver Registry

Between British Columbia Teachers' Federation and David Chudnosky, on his own behalf, and

on behalf of all Members of the British Columbia Teachers' Federation

Respondents (Plaintiffs)

and Her Majesty the Queen in right of the Province of British Columbia

Appellant

(Defendant)

FACTUM OF THE APPELLANT BILL 22 AND 28 APPEALS

Her Majesty the Queen in right of the Province of British Columbia Karen Horsman, Eva Ross, and Keith Evans Ministry of Justice, Legal Services Branch 1301-865 Hornby Street Vancouver, BC V6Z 2G3 Telephone: 604.660.3093 Facsimile: 604.660.6797

British Columbia Teachers Federation on behalf of all Members of the British Columbia Teachers Federation John Rogers, Q.C., Steven Rogers, Amanda Merritt, and Diane MacDonald Victory Square Law Office 500 - 128 West Pender Street Vancouver, BC V6B 1R8 Telephone: 604.684.8421 Facsimile: 604.684.8427

INDEX

CHRONOLOGY OF THE RELEVANT DATES IN THE LITIGATION ............................... i

OPENING STATEMENT .................................................................................................iv

PART I STATEMENT OF FACTS ................................................................................ 1

PART 2 ERRORS IN JUDGMENT ............................................................................. 23

PART 3 ARGUMENT ................................................................................................. 24

PART 4 NATURE OF ORDER SOUGHT ................................................................... 50

LIST OF AUTHORITIES ................................................................................................ 51

i

CHRONOLOGY OF THE RELEVANT DATES IN THE LITIGATION

Date Description

1987 Industrial Relations Act, R.S.B.C. 1979, c. 212 and the School Act, R.S.B.C. 1979, c. 375, amended to give teachers the right to form unions and to collectively bargain

1988-1994 Collective bargaining between local teachers associations and School Boards

June 1993 Korbin Commission: The Report of the Commission of Inquiry into the Public Service and Public Sector

1993 Public Sector Employers Act, S.B.C. 1993, c. 65 enacted [now R.S.B.C. 1996, c. 384] (PSEA), establishing PSEC and BCPSEA

1994 Public Education Labour Relations Act, S.B.C. 1994, c. 24 [now R.S.B.C. 1996, c. 382] (PELRA), enacted, establishing two-tiered collective bargaining for teachers

April 1996 Education and Health Collective Bargaining Assistance Act, S.B.C. 1996, c. 1 enacted

May 1996 BCTF and BCPSEA conclude a Transitional Collective Agreement (TCA), expiring June 30, 1998

April 17, 1998 1998 Agreement in Committee signed between government and the BCTF

July 30, 1998 Public Education Collective Agreement Act, S.B.C. 1998, c. 41 enacted

June 30, 2001 Expiry of the collective agreement constituted under the Public Education Collective Agreement Act

August 16, 2001 Skills Development and Labour Statutes Amendment Act, 2001, S.B.C. 2001, c. 33 enacted making K-12 education an essential service

January 2002 Bills 27 and 28, the Education Services Collective Agreement Act, S.B.C. 2002, c. 1 (ESCAA) and the Public Education Flexibility and Choice Act, S.B.C. 2002, c. 3 (PEFCA) enacted

May 30, 2002 BCTF files constitutional challenge

ii

July 17, 2002 Appointment of Eric Rice, Q.C. as arbitrator pursuant to s. 27.1 of the School Act / s. 9 of the PEFCA

August 30, 2002 Arbitrator Rice releases his decision

January 22, 2004 Decision of Shaw J., quashing Arbitrator Rices award: British Columbia Teachers Federation v. British Columbia Employers Association, 2004 BCSC 86

April 29, 2004 Bill 19, the Education Services Collective Agreement Amendment Act, 2004, S.B.C. 2004, c.16 (the Amendment Act) enacted

June 30, 2004 Expiry of the collective agreement imposed by ESCAA

October 2005 Vince Ready is appointed as Industrial Inquiry Commissioner

October 7, 2005 Teachers Collective Agreement Act, S.B.C 2005, c. 27, enacted

April 2006 Release of Vince Readys interim report

May 18, 2006 Bill 33, the Education (Learning Enhancement) Statutes Amendment Act, 2006, S.B.C. 2006, c. 21 enacted

June 2006 BCTF and BCPSEA conclude a 5-year collective agreement

June 8, 2007 Supreme Court of Canada judgment in Health Services and Support-Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27

January 2008 Post-Health Services settlements reached with affected health sector unions

November 2010 Summary trial of Bill 28 action

March 2011 February 2012

Collective Bargaining between BCTF and BCPSEA

April 13, 2011 Judgment in the Bill 28 action: British Columbia Teachers Federation v. British Columbia, 2011 BCSC 469 (BCTF#1)

May 20 November 28, 2011

Bill 28 consultation meetings

June 30, 2011 Expiry of 2006 collective agreement

September 2011 BCTF begins phase 1 of job action

iii

October 12, 2011 Judgment dismissing the BCTFs clarification application: British Columbia Teachers Federation v. British Columbia, 2011 BCSC 1372

February 23, 2012 Hughes Report, An Inquiry into the Status of Collective Bargaining between the B.C. Public School Employers Association and the British Columbia Teachers Federation

March 15, 2012 Bill 22, the Education Improvement Act, S.B.C. 2012, c. 3 (the EIA) enacted

April 14, 2012 Sections 8, 13 and 24 of the EIA come into force (EIA s. 26)

March 28, 2012 Dr. Charles Jago is appointed as a mediator (pursuant to section 6(1) of the EIA)

May 8, 2012 The BCTF files a petition challenging Dr. Jagos appointment

June 18, 2012 BCTF files application for further remedies in the Bill 28 action (the Further Remedies Application)

June 26, 2012 The BCTF and BCPSEA sign a memorandum of agreement for a two-year collective agreement

June 27, 2012 BCTF files notice of civil claim against the Province in BC Supreme Court action no. S-12458 (the Bill 22 action)

June 28, 2012 Decision dismissing the challenge to Dr. Jagos appointment: British Columbia Teachers Federation v. British Columbia, 2012 BCSC 960

June 29, 2012 BC Teachers ratify the memorandum of agreement

August 15, 2012 Province files a motion to strike the Further Remedies Application (Application to Strike).

September -November 2013

Trial of the Bill 22 action and hearing of the Bill 28 Remedies Application and Application to Strike

January 27, 2014 Judgment in the Bill 22 action and the Further Remedies Application: British Columbia Teachers Federation v. British Columbia, 2014 BCSC 121

February 4, 2014 Province files notices of appeal

February 26, 2014 Order by Harris J.A., staying two terms of the orders in the Bill 22 action pending the resolution of the appeal

iv

OPENING STATEMENT

In January 2002, legislation was enacted which removed contractual terms from an

expired collective agreement. The contractual terms established limits and ratios for

class size and composition and staffing levels in the K-12 education system in British

Columbia. From the perspective of government and school boards, the terms were

unduly restrictive and limited the flexibility of school boards in organizing classrooms.

The BCTF maintains that these contractual terms became entrenched constitutional

entitlements once they were included in a collective agreement. On this basis, at trial

the BCTF sought to have the terms retroactively restored to all the collective

agreements since 2002. This remedy was granted by the trial judge.

The claims advanced by the BCTF in the underlying proceedings focussed exclusively

on the freedom of association protection in s. 2(d) of the Canadian Charter of Rights

and Freedoms (the Charter). In a workplace context, s. 2(d) protects the right of

employees to a meaningful process to associate to make collective representations on

employment matters and to have those representations considered in good faith.

Section 2(d) protects a process of association, not its outcome; s. 2(d) does not

mandate a particular model of association; s. 2(d) does not give constitutional protection

to concluded collective agreement terms. These points all emerge from the Supreme

Court of Canada judgments in Health Services and Fraser.

In contrast, the judgment under appeal entitles members of the BCTF to the substantive

outcome sought in bargaining; it constitutionally mandates a Wagner Act model of

collective bargaining; and it accords constitutional status to contractual terms in an

expired collective agreement. The analysis cannot be reconciled with controlling

authority from the Supreme Court of Canada. Members of a union are constitutionally

entitled to a meaningful process of consultation if legislation may impact collective

agreement terms. Teachers were provided with such a process in this case.

1

PART I STATEMENT OF FACTS

A. Overview

1. While the factual and legislative history of these appeals is complex, at the heart

of both cases is an issue that can be simply stated: what are the constitutional limits on

governments ability to legislate collective agreement terms that a union views as

unfavourable?

2. The simple statement of the issue should not mask its fundamental importance.

Collective agreement terms may have broad impact on the cost and delivery of public

services. In the present case, for example, the contractual terms restored by the trial

judge direct public school organization and the annual allocation of several hundred

million dollars of the provincial budget. There are distinct and difficult dynamics at play

in a public sector bargaining dispute. Unlike a private employer, government cannot

simply shut its doors if the costs of running the business become uneconomical.

Legislation is one of the few tools available to government at the point of bargaining

impasse to resolve a labour dispute without sacrificing the achievement of fiscal and

policy imperatives in the delivery of public services.

3. At issue on these appeals is the legislative removal of collective agreement terms

favoured by the British Columbia Teachers Federation (the BCTF). The terms

dictated class size and composition and teacher staffing levels in all school districts in

British Columbia. For the most part, the clauses were negotiated locally from 1988-

1994, and/or imposed through a legislated collective agreement in 1998.

4. From the perspective of government, and the school boards that are the direct

employers of teachers, the clauses had the unacceptable effect of limiting the flexibility

of school boards to organize school classrooms, presenting obstacles to the integration

of students with special needs, and determining the costs of the K-12 education system

in accordance with restrictive formulas and ratios rather than a school-based

assessment of need. Class size and composition are also matters that impact teacher

workload. On this basis, the BCTF historically has sought to include these matters

within collective bargaining even though these topics are also fundamental issues of

educational policy.

2

5. In January 2002, seven months after the expiry of the then-existing collective

agreement, government introduced legislation deleting the clauses and prohibiting

bargaining on class size, composition and teacher staffing levels.

6. These appeals arise out of two decisions by the same trial judge (Griffin J.,

hereinafter the trial judge). In her April 13, 2011 judgment, the trial judge held that the

2002 legislation removing the clauses from the expired collective agreement infringed

teachers freedom of association under s. 2(d) of the Charter (BCTF#1). In her

January 27, 2014 judgment, the trial judge held that the governments remedial

legislation was unconstitutional (BCTF#2).

7. The BCTF posits that the deleted contractual terms have constitutional protection

under s. 2(d). This theory is wrong in law and restricts governments freedom of

legislative action when efforts to reach agreement through bargaining have been

exhausted. According to the BCTF, legislation may improve on collective agreement

entitlements but cannot remove them over the objection of the union without violating s.

2(d). On the BCTFs theory, collective agreement entitlements become constitutionally

entrenched in perpetuity. Although existing entitlements may present barriers to the

achievement of governments fiscal and policy objectives in the delivery of public

services (which may change over time), the governments only option is to enact

presumptively unconstitutional legislation in the hope it can later persuade a court that

the circumstances were sufficiently compelling to justify the supposed Charter violation

as a reasonable limit under s. 1.

8. In BCTF#2, the trial judge endorsed the theory posited by the BCTF that s. 2(d)

extends constitutional protection to collective agreement terms that are of significance

to members of a union. The judgment restored the deleted clauses retroactively to

2002, and deemed the clauses to form part of all intervening collective agreements.

These remedies were granted despite the fact that legislation under direct challenge

the Education Improvement Act, S.B.C. 2012, c. 3 (the EIA) restored the rights of

teachers to collectively bargain class size, class composition and staffing levels in the

next round of bargaining.

3

9. The issue of the Charters protection for collective bargaining only became a live

one with the decision of the Supreme Court of Canada in Health Services and Support

Facilities Subsector Bargaining Assn v. British Columbia, 2007 SCC 27 (Health

Services). The Court recognized for the first time that the protection of freedom of

association in s. 2(d) extended to some rights of association in the context of collective

bargaining. The scope and content of the s. 2(d) right, and the remedial implications of

a breach of the right, are matters of considerable and continuing controversy.

10. Of significance to the present appeals is Health Services characterization of the

protection under s. 2(d) as a right to a limited process to associate to pursue workplace

goals. What is protected is an associational activity, not the economic or substantive

outcome of that activity. After Health Services, employees have the protected freedom

to associate to make collective representations in the workplace, and a right to a

meaningful process by which to convey those representations. The critical issues on

these appeals are legal ones the content of the meaningful process, and the

available remedies in the event of a breach.

11. The Province submits that the trial judge misinterpreted the scope of the s. 2(d)

protection, and improperly assumed a supervisory jurisdiction to issue further remedies

in BCTF#1. Such legal errors aside, and even on the most generous interpretation of s.

2(d) available after Health Services, the remedies granted in BCTF#2 are contrary to

Charter principles, and unprecedented in their scope.

12. The cumulative effect of the remedies granted in the cases under appeal is to

retroactively restore collective agreement terms deleted over a decade ago, and provide

teachers with an ability to grieve non-compliance with the terms over the same period,

despite two intervening voluntary collective agreements. Teachers are permitted to

retain gains achieved in bargaining in the interim (including a 16% compensation

increase in the 2006-2011 collective agreement), and additionally benefit from collective

agreement gains that were not bargained but rather imposed by court order. No

principled interpretation of a right to a meaningful process of workplace negotiation can

support the retroactive insertion of terms into prior concluded collective agreements.

4

13. The financial implications of the judgment are enormous at trial, the BCTF

estimated the retroactive liability alone to be in the billions of dollars. The K-12

education system already consumes approximately $5.3 billion annually, roughly 12.3%

of the provincial budget. The constitutional and public policy implications are also

extraordinary, and unquantifiable in dollar terms. The trial judgment throws into doubt

governments ability to ever legislate an end to a public sector bargaining dispute, at

least to the extent that unionized employees consider the legislation unfavourable to

their interests, without presumptively violating s. 2(d) of the Charter. Collective

agreement terms become constitutional entitlements, but only for one side to the

bargaining relationship. This analysis is irreconcilable with Health Services.

B. Factual Background

14. The legal issues underpinning this appeal date back to the enactment of the

Education Services Collective Agreement Act, S.B.C. 2002, c. 1 (ESCAA or Bill 27),

and the Public Education Flexibility and Choice Act, S.B.C. 2002, c. 3 (PEFCA or Bill

28). The legislation was enacted following the expiry (on June 30, 2001) of the

collective agreement between the BCTF and the British Columbia Public School

Employers Association (BCPSEA).

15. A brief summary of this legislative and factual history is necessary to the

understanding of the matters at issue in the present appeals. The relevant history

includes the background to the establishment of the co-management model of public

sector bargaining generally, and specifically the establishment of BCPSEA as the

statutory bargaining agent for school districts.

The Structure of K-12 Bargaining

16. Teachers in British Columbia have had the right to form a union and collectively

bargain since 1987. Between 1988 and 1994, bargaining occurred between local

teacher associations and the-then 75 local school boards. [BCTF#1, Appeal Record

(AR) p. 321, para. 63]

17. The local agreements negotiated in this period contained a range of provisions

that impacted the operational flexibility of school districts, and drove resource allocation

decisions. The agreements commonly included class size limits, and class composition

5

provisions that limited the number of special needs students that could be in a

classroom. Less common in these local agreements were provisions that established

ratios for specialist teacher levels (often referred to as the non-enrolling ratios).

[Appellants Appeal Book (AAB) pp. 10, 52]

18. The structure of bargaining across the public sector was altered with the

publication of the 1993 Report of the Korbin Commission. The Commissions terms of

reference included inquiring into the decentralized collective bargaining structure then in

place in the public sector in British Columbia, and recommending the appropriate role

for government. The Korbin Report recommended a co-management model with

government working jointly with public sector employers. The interests of government

and employers would be represented in bargaining by employers associations, with

government exercising central control through the Public Sector Employers Council

(PSEC). Under this model, it was anticipated that government could work towards the

achievement of its fiscal and policy objectives through the establishment of bargaining

mandates. [AAB p. 1114-1115, 1119, 1122-1123; BCTF#1, AR pp. 323-324, paras. 70-

75]

19. The Korbin Report additionally reviewed human resource management in

particular public sectors, including K-12 education. The Report concluded that the

major weakness of the existing system of local bargaining was the significant weighting

of the balance of power in favour of unions. Over the objections of the BCTF, which

had advocated in favour of the status quo, the Korbin Report recommended the

establishment of a single employers association for K-12 bargaining, with

representatives of the Ministries of Finance and Education on the board of directors.

[AAB p. 1170-1172; BCTF#1, AR pp. 324-325, at paras. 74-79]

20. In 1993, BCPSEA was created as the employers association for K-12

bargaining. The Public Education Labour Relations Act, R.S.B.C. 1996, c. 382

(PELRA) enacted in 1994 [as S.B.C. 1994, c. 21], provided two-tiered bargaining with

the BCTF and BCPSEA negotiating provincial issues and BCTF locals and school

boards bargaining local issues. Cost provisions, which included workload and class

size restrictions in addition to compensation, were deemed to be provincial matters.

6

21. The transitional language in PELRA continued the local agreement terms in

effect until a provincial agreement was reached. The parties differing views as to the

status of these terms led to little progress being made at the provincial table. BCPSEA

took the position that provincial bargaining started from a blank slate, while the BCTF

maintained that the 75 local agreements provided the floor for bargaining so that no

existing local provision would be diminished in any manner by a new provincial

agreement. [AAB p. 53]

22. In May 1996, the BCTF and BCPSEA concluded a Transitional Collective

Agreement (TCA) to expire on June 30, 1998. Section 2(b) of the TCA extended the

transitional language in PELRA through the term of the TCA, thus continuing the local

agreement terms. The continuing rollover was without prejudice to the parties

competing views as to the effect of those terms (s. 2(e)). [AAB pp. 39-47]

23. Collective bargaining resumed in 1997, and negotiations between the BCTF and

BCPSEA continued without success. In 1998, the government of the day took over

direct negotiations with the BCTF and concluded an Agreement in Committee (the

1998 AIC) with the BCTF but without the involvement of BCPSEA. The 1998 AIC

carried forward terms and conditions in the TCA except where modified; established

district-wide non-enrolling staffing ratios; and included a Memorandum of Agreement on

K-3 Primary Class Size. [AAB pp. 73-88]

24. The 1998 AIC was overwhelmingly rejected by the school boards (by 86%) and

one district filed a complaint of bad faith bargaining against government and BCPSEA

with the Labour Relations Board.1 The complaint of bad faith bargaining, and the

refusal of districts to ratify the 1998 AIC, was rendered moot by the enactment of the

Public Education Collective Agreement Act, S.B.C. 1998, c. 41, which legislated the

1998 AIC as the provincial collective agreement for a term to expire on June 30, 2001.

25. The parties entered into a new round of bargaining in the spring of 2001.

Bargaining did not progress and in the fall of that year, teachers commenced a work

stoppage by withdrawing essential services in the first of three planned stages to a

strike action. By January 2002, the parties remained at impasse despite the intervening

1 Surrey School District No. 36 (Re), [1998] B.C.L.R.B.D. No. 389; AR pp. 329-330.

7

efforts of a fact finder and a mediator appointed to facilitate negotiations, and an

escalating strike. [BCTF#1, AR pp. 344-345, paras. 173 and 177]

The enactment of Bill 27 and Bill 28

26. On January 27, 2002, the ESCAA (Bill 27), and PEFCA (Bill 28) were enacted.

In relevant (and general) terms, the combined effect of PEFCA and ESCAA was to:

legislate a collective agreement, to expire in June 2004 (ESCAA, s. 2);

provide a 2.5% wage increase in each year of the agreement (ESCAA, s. 2(a)(i));

remove provisions in the expired agreement dealing with class size, composition

and non-enrolling ratios as of July 1, 2002, and prohibit bargaining on these

issues in the future (PEFCA, s. 8);

enact class size limits for K-3, and aggregate class size limits for all grades

(PEFCA, s. 12); and

provide for the appointment of an arbitrator to make a final and binding

determination of provisions in the existing collective agreement which were void

for inconsistency with the legislation (PEFCA, s. 9).

27. As anticipated by PEFCA, an arbitrator (Eric Rice, Q.C.) was subsequently

appointed to determine provisions in the collective agreement that were void for

inconsistency. The BCTF successfully challenged the arbitrators ruling on the ground

that he had misinterpreted his deletion power.2 The arbitrators award was restored

through the enactment of the Education Services Collective Agreement Act, 2004,

S.B.C. 2004, c. 16 (the Amendment Act or Bill 19).

28. The deleted clauses at issue in these appeals are those specified in the

Amendment Act (sometimes referred to as the Bill 19 deletions or the Rice

deletions). The volume of collective agreement terms that made up the Bill 19

2 BCTF v. BCPSEA, 2004 BCSC 86.

8

deletions is a function of the fact that there were 75 separate local agreements when

provincial bargaining was introduced in 1994.3

29. In 2002, the BCTF filed an action against the Province alleging that ESCAA and

PEFCA violated the rights of BCTF members under s. 2(d) (the Bill 28 action). The

statement of claim was later amended to add a challenge to the Amendment Act. The

constitutional challenge was held in abeyance while Health Services progressed to the

Supreme Court of Canada.

The 2006-2011 Collective Agreement

30. In 2004, the BCTF and BCPSEA resumed bargaining following the expiry of the

collective agreement imposed by ESCAA. The process followed the track of impasse

in bargaining, phased job action by teachers, the appointment of a fact finder, and

ultimately the enactment of legislation intended to end the impasse. The Teachers

Collective Agreement Act, S.B.C. 2005, c.27, enacted in the fall of 2005, continued the

existing collective agreement for a two-year term to expire June 30, 2006. In response,

BCTF members began an illegal strike that lasted 9 school days and resulted in a

finding of contempt against the union.4

31. In October 2005, Vince Ready was appointed as an Industrial Inquiry

Commissioner to facilitate the next round of collective bargaining, and also to facilitate a

return to work for teachers. As recommended by Mr. Ready in his interim report, the

government appointed a facilitator/mediator to assist the parties in negotiations. [AAB

pp. 1207-1210; Appellants Transcript Extract Book (TEB) pp. 281, 292-294]

32. In June 2006, BCPSEA and the BCTF concluded a collective agreement that

was ratified by both BCTF members and school districts. The agreement was for a 5-

year term, to expire June 30, 2011. The agreement included a cumulative 16% wage

increase, and a $4,000 signing bonus for every teacher. [TEB pp. 293-294]

3 The number of school districts in British Columbia was reduced from 75 to 60 in 1994

through reorganization and amalgamation of existing school boards, and the addition of a French language school board: Miscellaneous Statutes Amendment Act, 1996, S.B.C. 1996, c. 13, ss. 29 and 30(3). 4 BCPSEA v. BCTF, 2005 BCSC 1446.

9

33. Class size, composition, and staffing ratios were the subject of further legislative

reform prior to the trial of the Bill 28 action. In 2006, the Education (Learning

Enhancement) Statutes Amendment Act, 2006, S.B.C. 2006, c. 21 (Bill 33) amended

the School Act to establish a process of consultation with, or consent of, a teacher if a

class in grades 4 to 12 was to exceed 30 students, or three students with special

needs.5 The provisions contained timelines for carrying out consultation within 15

school days after the school opening day. The Bill 33 amendments have never been

the subject of a constitutional challenge.

The Bill 28 Trial and the April 13, 2011 Judgment in BCTF#1

34. The Bill 28 action was heard as a summary trial in November 2010. On April 13,

2011, the trial judge ruled that in enacting ss. 8, 9 and 15 of PEFCA, and s. 5 of the

Amendment Act, the government infringed freedom of association of teachers under s.

2(d), and that the infringement was not justified under s. 1. [BCTF#1, AR p. 390, at

para. 381]

35. The trial judge applied the two part test from Health Services: (i) whether

government action amounts to a substantial interference with workplace association

given the importance of the matter affected; and (ii) if so, whether government has

nonetheless preserved the fundamental precept of collective bargaining the duty to

consult and negotiate in good faith. Having found that the impugned provisions

constituted a substantial interference with workload matters of significant importance to

teachers, the trial judge turned to the second stage of the Health Services test:

297 If the government prohibited collective bargaining through legislation, but otherwise in the process of implementing the legislation replaced collective bargaining with an equivalent process of good faith consultation or negotiation, then the legislation might not be an interference with freedom of association. However, if in the process of legislating limits to collective bargaining the government did not otherwise allow employees to influence the legislative process or outcome in association, then the interference with s. 2(d) rights will be considered substantial.

298 Here, the legislative changes were brought about without any consultation with the teachers union. (Emphasis added) [AR pp. 370-371]

5 Since 2002, the School Act has consistently set out statutory class size maximums for

grades K-3 (22 students for kindergarten, 24 for grades 1-3): School Act, s. 76.1.

10

36. As will be seen, contrary to these passages the trial judge later concluded that

consultation with a view to influencing the legislative process was not an acceptable

government response to her judgment in BCTF#1 and the altered legal landscape of

Health Services.

37. The declaration that ss. 8 and 15 of PEFCA and s. 5 of the Amendment Act were

unconstitutional was suspended for twelve months to allow government time to address

the repercussions of this decision. With respect to s. 9 of PEFCA (providing for the

appointment of an arbitrator to identify the voided clauses), the trial judge stated:

383 Section 9 of PEFCA is no longer in force. The teachers have reserved the right to argue any additional remedies and they may seek a further hearing in this regard. [BCTF#1, AR p. 390]

38. As reviewed infra at paras. 77-82 and 165-177, the scope of the provision that

the BCTF may seek a further hearing in order to argue any additional remedies

became a point of on-going contention between the parties.

39. No party appealed the order in BCTF#1. Specifically, the Province did not

appeal the declaration of invalidity, and the BCTF did not appeal its suspension for a

12-month period. Indeed, the BCTF had requested this form of remedy. [AAB pp. 93-95]

The Post-BCTF#1 Consultation Process

40. Following BCTF#1, the Province invited the BCTF to enter into consultations

modelled on the Provinces successful consultation with health sector unions following

Health Services. The Province understood that the s. 2(d) infringement, as found by the

trial judge in BCTF#1, consisted of the governments failure to engage the BCTF in a

process of good faith consultation before enacting Bills 27 and 28. This interpretation

was consistent with the trial judges reasons, the remedy ordered a suspended

declaration of invalidity and also with Health Services.

41. The government appointed Paul Straszak to lead the consultation process. At

the relevant time (as of April 2011), Mr. Straszak was the President and Chief Executive

Officer of PSEC. Mr. Straszak had also been involved in the post-Health Services

consultation with health sector unions. In Health Services, the Supreme Court of

Canada had declared legislation (Bill 29) unconstitutional to the extent that it deleted

11

collective agreement terms without prior consultation with impacted unions. The terms

included a prohibition on contracting out of non-clinical jobs if it would result in layoffs.

(Health Services, at para. 130) [See also TEB pp. 281, 295, 301-302]

42. When Mr. Straszak was appointed to negotiate with the health sector unions in

2007, governments objectives were the same as they had been in 2002: to address the

sustainability crisis in health care resulting from rising costs and increasing demand.

To address these objectives, Mr. Straszak proposed a consultation process that

involved the participation of representatives of the Health Employers Association of BC

(HEABC) as well as representatives of the unions and government. The participation

of HEABC allowed for amendments to collective agreement terms resulting from

discussions. [AAB pp. 1239-1244; TEB pp. 295-296, 298-299]

43. In January 2008, settlements were reached with all four health sector unions.

The terms of settlement included a one-time $85 million payment. There were also

ameliorative amendments to the collective agreement to limit the number of positions

contracted out, enhanced consultation duties on the part of HEABC, and enhanced

options for affected employees in terms of, inter alia, severance and retraining. After

the settlement was ratified and changes to the collective agreement finalized, the

offending portions of Bill 29 were repealed. The repeal did not have the effect of

restoring the 2001 collective agreement terms. [AAB pp. 1245-1285; TEB pp. 297-300]

44. After BCTF#1, government attempted to pursue the same model of consultation

with the BCTF, without success. The gulf in the parties respective views of what

BCTF#1 required of government was evident from the first meeting on May 20, 2011.

Mr. Straszak advised the BCTF that the governments policy objectives had not

changed, that the formula-driven, restrictive approach of the 1998-2001 collective

agreement language was inconsistent with those objectives, and that the government

wished to discuss alternatives. As he had with the health unions, Mr. Straszak advised

the BCTF that there was a legislative window within which consultation had to complete

in this case, by the end of November 2011. [AAB pp. 1228-1232, 1239-1244, 275,

316-321; TEB pp. 301, 303-305]

12

45. Mr. Straszak proposed combining the consultation process with bargaining that

was then ongoing between the BCTF and BCPSEA. Two representatives of BCPSEA

attended the first consultation meeting, and every meeting thereafter. The purpose of a

combined process was to provide greater opportunity for settlement and permit changes

to the collective agreement language, as had been the case in the post-Health Services

negotiation. Mr. Straszaks speaking notes of the May 20 meeting, which he testified

were a verbatim transcript of the message he delivered to the BCTF at the first

consultation meeting on May 20, 2011, reflect the following advice:

We also understand that the BCTF wants to raise class size and composition at the bargaining table during the interim period while the impact of the courts decision on Bill 28 remains suspended.

This arrangement will allow the BCTF to do so. [AAB pp. 1228-1232; TEB pp. 302-304, 343, 362-363, 404-410]

46. The BCTF, for its part, advised government at this first meeting that it was not

looking to replicate the Health Services process. The BCTF rejected the governments

proposal to combine the Bill 28 consultation process with collective bargaining, and

insisted that the Bill 28 consultation should proceed separately. The BCTFs view was

that BCTF#1 had immediately restored the deleted clauses and full scope bargaining

rights, and it maintained that bargaining on class size and composition should now

begin from the floor of the 2001 language. The BCTFs position in the Bill 28

consultation was as stated in its first proposal:

Reinstatement of bargaining rights, collective agreement language, the conditions guaranteed by that language, and compensation for a decade of harm are necessary components of any BCTF agreement addressing the repercussions of Justice Griffins decision. [AAB pp. 604-637, see also 316-321, 357-364, 1226-1227; TEB pp. 23-25, 144-146, 150, 305]

47. This disagreement as to the remedial implications of BCTF#1 continued

throughout the six-month consultation process. In keeping with the BCTFs refusal to

combine consultation with bargaining, the processes unfolded parallel to, and

independent of, each other.

13

Consultation on Government Policy Objectives, Changing Demographics and Cost Implications

48. From the governments perspective, an important first step in the consultation

process was to explain why the ratios, formulas and class limits in the 1998-2001

collective agreement were inconsistent with government policy objectives. The

government asked Peter Drescher, a retired Deputy Superintendent in the Surrey

School District, to model the impacts on Surrey if the clauses were restored in 2011

within the parameters of existing funding. Mr. Dreschers employment history (dating

back to 1975) included experience as a teacher, vice-principal, Assistant

Superintendent, and Deputy Superintendent. Mr. Drescher had worked in the Surrey

school district from 1985 until his retirement in 2010. [TEB pp. 638-639, 306-308]

49. Mr. Dreschers presentation at the consultation table modelled the financial

implications for the Surrey School District of a return to the 2001 language, and also the

potential educational impacts if the clauses were returned within existing funding levels.

Surrey is the largest school district in British Columbia with just over 10% of the K-12

student population. Mr. Drescher calculated that a return to the 1998-2001 collective

agreement language in Surrey would require the addition of 347 full time equivalent

teaching positions at an annual compensation cost of $33 million. Mr. Drescher did not

attempt to calculate the capital and operating costs associated with the need to build

new classrooms to accommodate the additional teachers. [AAB pp. 495-536; TEB pp.

644-645, 660]

50. The potential programming impacts identified by Mr. Drescher included increased

wait lists, the relocation or elimination of choice programs, elimination of small classes

and cohort programs, and reduced capacity to integrate special needs students. Mr.

Dreschers presentation also described the changing demographics in Surrey over the

past decade that highlighted the disruption associated with return to collective

agreement terms that had been negotiated (or legislatively imposed) in the 1980s and

1990s. In the intervening period Surrey had, for example, experienced dramatic

increases in the number of aboriginal, English as a second language, and special needs

students. [TEB pp. 640-641; 671-674]

14

51. The government's proposal for settlement in the Bill 28 consultation included a Class Organization Fund ("COF"), intended to ameliorate teacher workload and learning challenges in classrooms by identifying need at the school level. [AAB p. 557-558] The proposal committed government to a funding level for COF - $30 million in year 1, $60 million in year 2, and $75 million annually thereafter.

52. No such negotiations occurred because the BCTF rejected the concept of COF as a remedy that addressed the repercussions of BCTF#1. The BCTF provided no response to any proposal the government made in relation to the COF, including a proposal that the allocation process form part of the collective agreement and be subject to a grievance procedure. [AAB pp. 553-556, 559, 566-575, 686-698; TEB pp. 177-180, 183-185] SCTF Presents its Proposals Without Analysis of Cost Implications

53. The BCTF presented its first proposal to settle outstanding issues from BCTF#1 in October 2011. This was not so much a proposal as a reiteration of the position that BCTF#1 required immediate restoration of the deleted terms, restoration of bargaining rights, and compensation for a "decade of harm". [AAB pp. 604-637; TEB p. 150] 54. The BCTF's second proposal, tabled a month later, was also modelled on the deleted language. The only change was that the second proposal prescribed more restrictive ratios and formulas, including lower non-enrolling ratios than contained in the

15

1998-2001 collective agreement and additional ratios for two new categories of

specialist teachers. The proposal would also have obliged the Province to provide

compensation in the form of a fund to cover the cost of an increase in out-of-class

preparation time for all K-12 teachers to 25% over four years. [AAB pp. 725-731, 73-88;

TEB pp. 90-91, 154-155, 169-173]

55. Mr. Drescher, on behalf of the Province, prepared a rough costing of the BCTFs

second proposal. The BCTF did not prepare any costing. Mr. Dreschers analysis

estimated that the BCTFs second proposal would require the addition of approximately

1500 teachers in Surrey alone, at an annual compensation cost of $137 million. Again,

Mr. Drescher did not attempt to estimate the associated capital and operating costs. On

Mr. Dreschers analysis the BCTFs second proposal was, accordingly, more restrictive

and over four times more expensive than the first. [AAB p. 821-822, 1233-1238; TEB

pp. 175, 666, 668]

56. From the perspective of the legal issues in this case, it is unnecessary to provide

in a more detailed summary of the 13 meetings that occurred between May 2011 and

the conclusion of the Bill 28 consultation at the end of November 2011. At trial, the

parties filed a joint chronology containing a comprehensive set of meeting notes and

correspondence. [AAB pp. 273-950] Through the consultation process, the parties had

incompatible interpretations of the governments constitutional obligations, specifically

whether the governments obligation was to consult with the BCTF or to provide the

BCTF with the substantive outcome it sought restoration of the clauses.

The Application to the Trial Judge for Clarification of BCTF#1

57. The parties divergent interpretations as to the process constitutionally required

of government after BCTF#1 prompted the BCTF in the fall of 2011 to return to the trial

judge on an application for clarification of the decision. The affidavit material included

the correspondence exchanged between the parties to that point, which evidenced the

disagreement as to the implications of BCTF#1. [AAB p. 101-116, 127-129]

58. Consistent with its view that BCTF#1 had finally resolved all issues between the

parties in relation to Bill 28, the Province argued that the trial judge was functus and had

no jurisdiction to revisit the ruling. The Province argued in the alternative that if the

16

BCTF could seek post-judgment clarification, consultation was the constitutional

requirement imposed by BCTF#1. Consistent with its view that the trial judge had

retained ongoing supervisory jurisdiction, the BCTF sought direction that governments

position at the Bill 28 table did not comply with BCTF#1, and that the effect of BCTF#1

was to immediately restore the deleted clauses and collective bargaining rights. [AAB p.

117-126]

59. On October 11, 2011, the trial judge dismissed the application for clarification

based, at least in part, on the principle of functus officio:

6 The jurisdiction to reopen a case after judgment has been rendered is extremely limited. This is because of the public interest in the finality of litigation. Without finality, the process and cost of litigation would be never-ending, as parties would forever be returning to the court to re-argue the case and for tactical advantage. This would put access to justice even more out of reach than it appears to be now.7

2011/2012 Bargaining Between the BCTF and BCPSEA

60. The 2006 collective agreement between the BCTF and BCPSEA expired on June

30, 2011. Collective bargaining between the parties began in March 2011 and by

February 2012, the BCTF and BCPSEA had met 78 times without concluding a

collective agreement. [AAB pp. 1219-1222]

61. A significant barrier to successful bargaining in this round was the net zero

mandate from government that bound BCPSEA, and all public sector employers and

employers associations negotiating in this period. The mandate was driven by

governments strong policy of fiscal restraint in the face of the global economic crisis.

The fiscal plan was designed to address budget deficits created by the economic crisis

without decreasing wages or reducing spending on core services, including K-12

education. Under the mandate, any increases in compensation had to be balanced by

savings in benefits or from operational changes. [AAB pp. 951-990; TEB pp. 286-289,

484-485, 839-841, 843-845, 846, 850-852]

7 BCTF v. British Columbia, 2011 BCSC 1372. [AAB pp. 578-582]

17

62. The BCTF sought substantial salary and benefit increases for its members that

exceeded the net zero mandate.8 Bargaining stalled early over the issue of

compensation, and did not progress. A fact-finder appointed by government in February

2012 concluded that voluntary settlement was unlikely and that the net zero mandate

was a fundamental obstacle to the successful conclusion of a collective agreement.

The Labour Relations Board (LRB) refused the BCTFs request to appoint a mediator

because of the futility of mediation in the face of the BCTFs rejection of the net zero

mandate. [AAB pp. 867-885, 1216-1222, 1444-1445, 1223-1225; TEB p. 215]

The Phase One Teachers Strike in 2011/2012

63. A final feature of collective bargaining in 2011/2012 was the partial withdrawal of

services by teachers. The bargaining dispute required the LRB to designate essential

service levels.9 The orders initially agreed to by the BCTF and BCPSEA set out the

duties that teachers would not perform (preparing reports, supervision etc.) at each

phase of the planned withdrawal of service. This approach was unusual. In other

sectors, essential service orders prescribe duties that will be performed, based on a full

rather than partial withdrawal of services.10

64. One difficulty with these essential service orders was that they did not generate

economic pressure that would promote settlement. As the LRB commented early on in

the dispute:

This does not result in a balance of pressure in a controlled strike environment because while students and the public are impacted, and the Employers are impacted, the bargaining unit members continue to receive full salary.11

8 The cost of BCTFs proposals in bargaining was a matter of some controversy. The BCTF

rejected Vince Readys recommendation in 2006 that the parties develop common costing data in future rounds of bargaining. On BCPSEAs analysis, the compensation cost of the final BCTF proposal was in excess of $2 billion over three years: AAB pp. 1211-1215. 9 Section 72 of the Labour Relations Code requires the Board to designate as essential

services those facilities, productions, and services the Board considers necessary or essential to prevent immediate disruption to the provision of educational programs under the School Act. Essential services levels may be set by agreement with the assistance of a mediator. 10

BCPSEA (Re), [2011] B.C.L.R.B.D. No. 161, paras. 19-20. 11

Ibid., at para. 61(5).

18

65. The LRB recommended that the essential service orders be amended to be

consistent with the approach in other sectors and that compensation should be based

on the percentage of days worked compared to the norm.12

66. The BCTF and BCPSEA did not amend the essential service orders as

recommended. The Board dismissed BCPSEAs subsequent application to vary the

orders in order to bring balanced economic pressure to bear, observing:

68 .the parties do have other options by which to ensure maximum economic pressure is brought to bear in this dispute. For example, while unattractive, the parties have the right to expand the strike or to lockout which would trigger the next phase in the labour dispute and more fully engage the essential services designation process.13

67. By early 2012, government was thus facing an impending deadline for a

response to BCTF#1, a partial withdrawal of services by BCTF members that showed

no sign of ending, and a collective bargaining process that had reached impasse over

issues unrelated to Bill 28. This was the context for the enactment of the EIA.

The Education Improvement Act of 2012

68. The EIA passed third reading in March 2012. Sections 8 and 13 were brought

into force on April 14, 2012. The objectives of the EIA included bringing an end to the

teachers strike, and addressing the repercussions of BCTF#1.

69. In furtherance of the first objective, Part 1 of the EIA established a cooling off

period during which strikes and lockouts were prohibited, and provided for the

appointment of a mediator to assist the BCTF and BCPSEA in negotiating a collective

agreement. The mediators terms of reference included that a new collective agreement

was to be for a term of July 1, 2011-June 30, 2013, and must meet the net zero

mandate.

70. Part 2 of the EIA repealed the impugned provisions of Bill 28. Section 8 of the

EIA did continue the deletion of the 1998-2001 collective agreement terms on class

12

Ibid., at para. 61(5). 13

BCPSEA (Re), [2011] B.C.L.R.B.D. No. 214, reconsideration refused [2011] B.C.L.R.B.D. No. 236.

19

size, composition and non-enrolling ratios. However, the right to bargain these subjects

was restored as of July 1, 2013.14

71. Section 18 of the EIA enacted s. 115.2 of the School Act, which provides for the

establishment of a learning improvement fund (the LIF). The LIF is the statutory

embodiment of the class organization fund (COF), which had been proposed by the

Province in the course of the Bill 28 consultation process. The process of allocating

monies in the LIF involves various forms of consultation at the provincial, district and

school levels, including consultation with teachers.15

72. The Class Size and Compensation Regulation, B.C. Reg. 52/2012, was enacted

under the EIA as a separate, although related, piece of the educational policy agenda.

The Regulation amended the consultation and consent process in Bill 33 (supra at para.

33). Together with amendments to the School Act, the Regulation allowed classes in

grades 4-12 to exceed 30 in prescribed circumstances, with teachers receiving the

remedy of compensation, additional preparation time or additional professional

development time. The requirement for principals to consult with teachers regarding

class organization was moved to the School Regulation, B.C. Reg. 265/89, in a

separate amendment, and consultation was no longer limited to the first 15 days of the

school year. The change in timing of consultation was intended to act in coordination

with the LIF allocation process. [TEB pp. 555, 557]

73. The BCTFs dissatisfaction with the COF also extended to the LIF. In May 2012,

the BCTF executive directed local presidents to advise teachers not to participate in LIF

consultation, other than through the presentation of a teaching staff needs plan based

on the deleted clauses. In short, the most assistance the BCTF was ever prepared to

provide in identifying resource needs in complex classrooms was through the collective

presentation of a staffing plan based on standardized ratios and class limits. [AAB p.

1327-1334, 1341-1342; TEB pp. 187-189, 195-196]

14

Section 13 of the Education Improvement Act enacted a new s. 27 of the School Act, which continued the restrictions on bargaining class size and composition but only on a time-limited basis through June 30, 2013 (see s. 27(7)). 15

The consultation requirements at the district level are set out in the Learning Improvement Fund Regulation, B.C. Reg. 53/2012, and in s. 115.2(3) of the School Act, enacted by s. 19 of the EIA.

20

The 2011-2013 Collective Agreement Mediated by Dr. Jago

74. On March 28, 2012, the Minister of Education appointed Dr. Charles Jago as

mediator pursuant to s. 6(1) of the EIA. The BCTF almost immediately filed a legal

challenge to the appointment of Dr. Jago, alleging that he lacked the requisite

qualifications and impartiality to act as a mediator under the EIA. The challenge was

initially filed with the LRB, and subsequently in British Columbia Supreme Court.

75. The mediation proceeded through April, May and June 2012 even as the BCTF

pursued its legal challenge in court. [TEB pp. 205-206]

76. The mediation process was ultimately successful. On June 26, 2012, the BCTF

and BCPSEA signed a memorandum of agreement which was within net zero, provided

levelling up to standardize benefits across the Province, and deferred further discussion

on the Ministry of Educations policy objectives. The agreement was ratified by the

teachers on June 29, 2012, one day after the BCTFs legal challenge to Dr. Jagos

appointment was dismissed.16 [AAB p. 1286-1326, 950; TEB pp.132, 203, 558-559]

The Application for Further Remedies in BCTF#1 and Challenge to the EIA

77. On June 18, 2012, the BCTF filed an application in the Bill 28 action seeking

declaratory orders and damages (the Further Remedies Application). Specifically, the

BCTF sought declarations that ss. 8 and 15 of PEFCA and s. 5 of the Amendment Act

(statutes that had been repealed by the EIA) were unconstitutional from the date of their

enactment; that the deleted clauses be considered part of the collective agreement after

July 1, 2002; and that the government had failed to address the repercussions of the

[Bill 28] Decision, through the passage of Bill 22 or otherwise. [AR pp. 75-84]

78. The factual basis for the Further Remedies Application relied almost entirely on

events which post-dated judgment in BCTF#1 the Bill 28 consultation process,

collective bargaining between the BCTF and BCPSEA and the net zero mandate, and

the enactment of the EIA. [AAB pp. 135-143] The Application asserted that

governments actions cumulatively over this period had not addressed the

repercussions of BCTF#1. Over the objections of the Province, the BCTF set the

16

BCTF v. British Columbia, 2012 BCSC 960.

21

Further Remedies Application down for a four-day hearing before the trial judge in

December 2012.

79. On June 27, 2012, the BCTF filed a notice of civil claim seeking relief in relation

to the same events described in the Further Remedies Application (the Bill 22 action).

[AR pp. 1-14]

80. At the BCTFs request, the trial judge was appointed as the trial management

judge in the Bill 22 action. [AAB pp. 166-169]

81. On August 15, 2012, the Province filed a motion to strike the Further Remedies

Application on the ground that the declaratory relief sought by the BCTF violated the

principle of functus officio (the Application to Strike). [AR pp. 95-104] The Further

Remedies Application sought a different form of declaratory relief after the expiry of the

appeal period in BCTF#1, after entry of the final order, and after the impugned

legislation had been repealed and remedial legislation enacted.

82. The parties eventually agreed to a procedural compromise that involved the

adjournment of both the Further Remedies Application and the Application to Strike. All

matters - the Bill 28 Remedies Application, the Application to Strike, and the Bill 22

action were set down for hearing at the same time in September 2013. The

agreement was without prejudice to the parties respective positions. The Province

maintained its objection to the jurisdiction of the Court to revisit the declaratory

remedies granted in BCTF#1. This objection was argued at trial.

C. Trial Judgment in BCTF#2

83. In a judgment released on January 27, 2014, the trial judge found the EIA

unconstitutional to the extent that it continued the deletion of the clauses, and delayed

the restoration of bargaining rights. The trial judge rejected the Provinces argument that

the manner in which the EIA was enacted preserved good faith consultation and thus,

on the test from Health Services, the Act did not violate s. 2(d). Pre-legislative

consultation was, in the trial judges view, generally irrelevant to the question of whether

legislation infringed the freedom of association protection in the Charter particularly

where government was not the direct employer. If pre-legislative consultation was ever

22

relevant, and the trial judge expressed doubt as to whether it ever would be, the

process had to be one of collective bargaining between the union and the employer.

[181] On this basis alone, the fact that government was not the employer and BCPSEA was not at the negotiations table, I find that the fact and content of the governments negotiations with the BCTF following the Bill 28 Decision are simply not relevant to the issues I must decide regarding whether or not Bill 22 was a substantial interference with s. 2(d) Charter rights.

84. In the alternative, if government discussions with the BCTF were legally relevant,

the trial judge held that government had bargained in bad faith. [AR p. 241, paras. 397-

398]

85. The trial judge rejected the BCTFs remaining constitutional challenges to the

provisions establishing the LIF, the Class Size and Compensation Regulation, the

mediators terms of reference under s. 6 of the EIA, and the net zero mandate.

86. The trial judge rejected the contention of the BCTF that the parameters placed on

collective bargaining (particularly net zero and the Ministrys Educations policy

objectives) were so constraining as to infringe s. 2(d). The trial judge found that the

cumulative measures in this case in total came close to the tipping point, but stopped

short of infringing s. 2(d). No concrete guidance was offered as to what might tip the

balance in future cases, only the observation that the line was a difficult one to draw.

[AR p. 265-266, paras. 546-550]

87. As to remedies, the trial judge granted the declaratory relief sought by the BCTF

in the Further Remedies Application. That is, she declared that the provisions of PEFCA

and the Amendment Act were unconstitutional from the date of their enactment in 2002,

and the deleted clauses were declared to form part of the collective agreement as of

July 2002. The result is to provide teachers with the ability to retroactively grieve non-

compliance with clauses that have not been in the collective agreement for over a

decade. [AR pp. 290-291, paras. 677, 679, 682; see also AR pp. 75-76]

88. In granting the additional declaratory relief in the Bill 28 action, the trial judge did

not rule on the Provinces Application to Strike and the jurisdictional objections it raised.

While indicating that the Court was not taking on a supervisory role in relation to the

23

governments remedial response to BCTF#1, the trial judge did not explain how this can

be reconciled with her consideration of post-judgment events in revisiting the

declaratory relief in BCTF#1. [AR pp. 282-284, paras. 639-649]

89. Finally, the trial judge ordered the government to pay the BCTF $2 million as an

additional remedy under s. 24(1) of the Charter for the one-year delay in returning

collective bargaining rights on class size and composition under s.13 of the EIA.

PART 2 ERRORS IN JUDGMENT

90. The trial judge erred in the following respects in her decision that ss. 8 and 13 of

the EIA violate s. 2(d) of the Charter:

i. in finding that pre-legislative consultation with government is irrelevant to the

issue of whether legislation infringes the freedom of association protection in

s. 2(d) of the Charter;

ii. in finding that if pre-legislative consultation is relevant, it must consist of a

process akin to Wagner Act collective bargaining between employee and

employer; and

iii. in finding that the governments conduct in the Bill 28 consultation process

amounted to bad faith bargaining.

91. In the alternative, the trial judge erred in concluding that ss. 8 and 13 of the EIA

were not justified under s. 1 of the Charter to the extent the provisions infringed s. 2(d).

92. The trial judge erred in awarding Charter damages in conjunction with a

declaration of invalidity in relation to the delay in restoration of bargaining rights under

s. 13 of the EIA. Alternatively, the sum of Charter damages awarded by the trial judge

was inordinate.

93. The trial judge erred in the following respects in issuing retroactive declaratory

relief in relation to PEFCA and the Amendment Act:

i. in assuming a supervisory jurisdiction to grant additional declaratory remedies

in a concluded action on the basis of events that post-dated the judgment;

and

24

ii. in the alternative, in issuing retroactive declarations that are inconsistent with

the protected right under s. 2(d) and the principle of judicial restraint in

granting of constitutional remedies.

94. With the exception of paragraph 90(iii), the errors alleged are all errors of law

reviewable on a standard of correctness. For the reasons detailed infra at paras. 110-

150, the finding of bad faith bargaining involved legal error (in the trial judges statement

of the legal standard to be met), as well as one material palpable and overriding error of

fact.

PART 3 ARGUMENT

95. The sole basis for the BCTFs constitutional challenge in both actions is the

protection for freedom of association in s. 2(d) of the Charter. In 1987, the Supreme

Court of Canada held in a series of three decisions, known as the labour trilogy, that s.

2(d) did not extend constitutional protection to collective bargaining.17 The trilogy

remained the law in Canada until 2007 and the decision in Health Services. Overruling

two decades of jurisprudence, the Court in Health Services held that s. 2(d) protects a

process of collective bargaining, although not its outcomes.

96. These appeals turn on the interpretation of Health Services, particularly in light of

the clarification provided by the subsequent judgment in Ontario (Attorney General) v.

Fraser, 2011 SCC 20 (Fraser). The divergent position between the parties on this

appeal, and throughout the underlying proceedings, is largely a function of a legal

disagreement as to the scope of protection under s. 2(d) of the Charter after Health

Services and Fraser for concluded collective agreement terms. For this reason, it is

important to start with a brief review of the current state of the law.

Health Services and Fraser

97. The plaintiffs in Health Services were health sector unions who were the certified

bargaining agents for health care workers in British Columbia. Collective bargaining in

the health care sector in British Columbia, like K-12 education, is carried out on the co-

management model. In Health Services, the certified bargaining agent for health sector 17

Reference re Public Service Employee Relations Act (Alberta), [1987] 1 S.C.R. 313; PSAC v. Canada, [1987] 1 S.C.R. 424; and RWDSU v. Saskatchewan, [1987] 1 S.C.R. 460.

25

employers was HEABC, with government providing direction in the form of fiscal and

policy mandates.

98. The unions complaint in Health Services concerned the legislative removal of

collective agreement terms, and a prohibition on the inclusion of the same terms in

future collective agreements. Bill 29 (enacted in January 2002) removed the terms from

existing collective agreements that would otherwise have expired on March 31, 2004.

There was no consultation with the impacted unions in advance.

99. Overruling the trilogy, the Court in Health Services concluded that the freedom of

association protection in s. 2(d) included protection for the process (but not outcome) of

collective bargaining on workplace issues. The right to collective bargaining was

described as a limited right. It does not guarantee an economic outcome, nor a right to

a particular model of labour relations or specific bargaining method. (Health Services,

para. 91)

100. State action might violate s. 2(d) if it substantially interferes with freedom of

association. By way of example, the Court in Health Services stated:

92 .Acts of bad faith, or unilateral nullification of negotiated terms without any process of meaningful discussion and consultation may also significantly undermine the process of collective bargaining... (Emphasis added)

101. The question of whether a law or state action constitutes substantial interference

entails a two-step inquiry. The first inquiry is into the importance of the matter affected

to the process of association. If the matters affected do not substantially impact on the

process of associating to achieve collective goals, the measure does not violate s. 2(d)

and there is no need for the second inquiry. (Health Services, paras. 92-96)

102. The second inquiry asks: does the impugned law or government action respect

the fundamental precept of collective bargaining: the duty to consult and negotiate in

good faith. There is no s. 2(d) violation if the impugned measure preserves a process of

consultation and good faith. (Health Services, para. 97)

103. In addressing the second inquiry, the Court in Health Services found that the

statutory duty to bargain in good faith imposed by labour statutes may inform the

26

analysis of whether a process of good faith consultation has been preserved. (Health

Services, paras. 98-106) However, in neither Health Services nor Fraser did the Court

contemplate the wholesale incorporation of Wagner Act good faith jurisprudence into

the Charter. On the contrary, the Courts later judgment in Fraser expressly rejected the

Wagner Act model as constitutionally mandated.

104. The Court in Health Services concluded that the provisions of the impugned

legislation which interfered with existing collective agreement terms and precluded

future collective bargaining on issues of contracting out, layoffs, and bumping violated s.

2(d). The declaration of invalidity was suspended for 12 months to allow the

government to address the repercussions of the decision. (Health Services, para. 168)

105. In Fraser, the Supreme Court of Canada returned to s. 2(d) of the Charter and its

protection for collective bargaining. The constitutional issue in Fraser arose in the

context of a challenge to Ontarios Agricultural Employees Protection Act (AEPA), a

separate labour relations scheme for farm workers in Ontario. The AEPA excluded farm

workers from the scope of Ontarios Labour Relations Act, and provided an alternative

and more limited right of association.

106. The Ontario Court of Appeal had declared AEPA to be constitutionally invalid

because it did not provide the minimum statutory protections required to enable

agriculture workers to bargain effectively in a meaningful way; that is, in accordance

with the Wagner Act model of collective bargaining. On appeal, the Supreme Court of

Canada framed the issue before it as follows:

The ultimate question is whether s. 2(d), properly understood and applied, requires the Ontario legislature to provide a particular form of collective bargaining rights to agricultural workers, in order to secure the effective exercise of their associational rights. (Fraser, para. 18)

107. The Court concluded that s. 2(d) did not contain such a requirement. The

majority reviewed the pre-Fraser jurisprudence on s. 2(d) and noted that even Health

Services (the high-water mark) recognized only a constitutional right to a meaningful

process for workers to associate to achieve workplace goals. Section 2(d) does not

guarantee either a particular process or a particular outcome. Section 2(d) may be

violated by a rule that bans employee associations, or a system that renders it

27

impossible to have meaningful negotiations on workplace matters. Provided employees

have the opportunity to make meaningful representations and have them considered in

good faith, the constitutional requirement is met. The Court summarized the content of

the s. 2(d) protection in the following four points at para. 41 of Fraser:

Section 2(d) requires the parties to meet and engage in meaningful dialogue.

They must avoid unnecessary delays and make a reasonable effort to arrive at

an acceptable contract;

Section 2(d) does not impose a particular process;

Section 2(d) does not require the parties to conclude an agreement or accept any

particular terms and does not guarantee a legislated dispute resolution

mechanism in the case of an impasse; and

Section 2(d) protects only the right to a general process of collective bargaining,

not to a particular model of labour relations or to a specific bargaining method.

108. Notably, Abella J. authored a dissenting judgment in Fraser in which she

concluded that the Wagner Act model of collective bargaining was the constitutional

standard established by Health Services, and the AEPA unconstitutional to the extent it

did not meet the standard. The majority in Fraser was explicit in rejecting such an

interpretation of Health Services.

109. The implications of s. 2(d) for the legislative nullification of collective agreement

terms is but one of a broader subset of issues that have generated a flood of

constitutional litigation in the aftermath of Health Services.18 Whatever other uncertainty

18 Issues such as whether s. 2(d) protects the right to strike, and the impact of Health Services on wage restraint measures, continue to work their way through the courts: see, for example: Mounted Police Association of Ontario v. Canada (Attorney General), 2012 ONCA 363, leave to appeal granted [2012] S.C.C.A. 350, heard and judgement reserved February 18, 2014; Meredith v. Canada (Attorney General), 2013 FCA 112, leave to appeal granted [2013] S.C.C.A. No. 263, heard and judgement reserved February 19, 2014; Association of Justice Counsel v. Canada (Attorney General), 2012 ONCA 530, leave to appeal refused, [2012] S.C.C.A. No. 430; Federal Government Dockyard Trades and Labour Council v. Canada (Attorney General), 2013 BCCA 371, application for leave to appeal submitted to the Court November 18, 2013; Saskatchewan v. Saskatchewan Federation of Labour, 2013 SKCA 43, leave to appeal

28

might exist on the scope and content of s. 2(d), three points emerge from Health

Services and its clarification in Fraser: (i) s. 2(d) protects process and not outcome,

(ii) s. 2(d) does not constitutionalize collective agreement terms, and (iii) s. 2(d) does

not guarantee the right to any particular process of consultation or negotiation it

requires only a process of workplace dialogue that is meaningful. Nothing in either

Health Services or Fraser supports a constitutional entitlement on the part of employees

to insist in the inclusion of specific terms in a renewal collective agreement.

Sections 8 and 13 of the Education Improvement Act

Issues I and II the Constitutional Standard Imposed Under s. 2(d) of the Charter

110. In BCTF#2, the trial judge held that pre-legislative consultation between

government and public sector unions is not relevant in assessing an alleged breach of

s. 2(d). [AR pp. 176-180, paras. 72-93]. Alternatively, she held that if pre-legislative

consultation could ever be relevant, it had to be akin to a process of Wagner Act

collective bargaining between employer and employee. The Bill 28 consultation

process did not involve collective bargaining between employer and employee. On this

basis alone, the trial judge found that the fact and content of the consultation was not

relevant to the question of whether the EIA violated s. 2(d). [AR p. 198, para. 181].

111. Embedded in this aspect of the trial judges analysis are two separate, but

interrelated, questions of law: (i) what process is constitutionally guaranteed under s.

2(d)?; and (ii) can the legislature remove collective agreement terms without infringing

s. 2(d) if a proper consultative process is provided to unions in advance? The trial

judges answer to the first question is that s. 2(d) protects Wagner Act collective

bargaining between the BCTF and BCPSEA. Her answer to the second appears to be

that legislation is presumptively unconstitutional if it removes significant collective

agreement terms, whether or not there was good faith consultation in advance.

112. The trial judge erred in law in these conclusions. The legal conclusions are

inconsistent with Health Services and Fraser and directly contrary to statements made

granted, 2013 S.C.C.A. No. 257, heard and judgment reserved May 16, 2014; Alberta Union of Provincial Employees v. Alberta, 2014 ABQB 97; Professional Institute of the Public Service of Canada v. Canada (Attorney General), 2014 ONSC 965.

29

by the trial judge in BCTF#1. In that earlier judgment, the trial judge indicated that

consultation with the BCTF about the impugned 2002 legislation prior to its enactment

might have cured the substantial interference with s. 2(d). [See: BCTF#1, AR pp. 301,

343, 347, 370-371, 373, paras. 8, 165, 186, 297-298, 307-308] In BCTF#2, the trial

judge changed the goalposts of the analysis.

Section 2(d) Does Not Guarantee a Wagner Act Model of Collective Bargaining

113. As emphasized in Fraser, what s. 2(d) protects is the freedom of employees to a

meaningful process of workplace association. (Fraser, paras. 42-43, 50-51, 117) While

Fraser and Health Services both refer to the obligation on an employer to listen to the

collective representations of employees in good faith, that term was plainly not intended

in any prescriptive sense. The question of what constitutes a meaningful process is

dependent on the factual context. (Fraser, paras. 44-48) In Fraser, the issue was not

legislative removal of collective agreement terms, but rather statutory protection for

agricultural workers that would allow a meaningful process of workplace association. In

the context of Fraser, a meaningful process was one that permitted the workers to

attempt to influence their conditions of employment through collective representations to

a private employer, who was required in turn to consider the collective representations

in good faith. (Fraser, paras. 2-3, 43, 51, 54, 98-99, 107)

114. Health Services is a closer parallel to the present case, but not a precise

analogy. In Health Services, the impugned legislation removed existing collective

agreement terms mid-contract and prohibited future bargaining. The government was

not the direct employer in Health Services either, but the obligation to engage in a

process of meaningful discussion and consultation prior to the removal of collective

agreement terms was plainly placed on government. (Health Services, para. 92)

Indeed, as clarified in Fraser, any reference to the obligations of an employer in Health

Services was intended to encompass government as the indirect employer of health

sector workers. (Fraser, para. 35)

115. This is consistent with British Columbias co-management model of public sector

bargaining. A primary impetus for the statutory creation of employers associations to

bargain under the centralized control of PSEC was to ensure government control over

30

public sector collective bargaining commitments. Government mandates in bargaining

serve the principle of democratic accountability. By way of example, in fiscal year

2012/13, roughly 12.3% of the provincial budget ($5.33 billion) was allocated to K-12

education. Government, on behalf of the public it represents, is directly responsible for

how 12% of the provincial budget is spent. [AAB pp. 994, 1123]

116. Although the BCTF characterizes class size and composition as a funding issue,

the reality is more complex. Funding for K-12 education has increased in the decade

since the enactment of PEFCA, despite a corresponding decline in student enrolment.

[AAB pp. 980-981, 989-990, 997; TEB pp. 859-860] K-12 funding is allocated on a

different model now than it was in 2001. The deleted clauses are undeniably expensive,

as Mr. Dreschers analysis evidences. More importantly, government considers class

size limits, formulas and staffing ratios to be an inefficient means of allocating funding,

unresponsive to actual school need, and restrictive in terms of the ability of school

districts to offer a range of school programming. The issue with the deleted clauses,

accordingly, is not simply how much money should be spent on K-12 education but how

it is to be spent and who should make such decisions.

117. The BCTFs insistence on negotiating class size and composition has extended

collective bargaining beyond its traditional role in addressing a narrow range of

economic interests concerned with wages, benefits and job security. Class size and

composition are, in part, matters of educational and fiscal policy that are of interest to all

stakeholders in the K-12 education system (teachers, students, families,

administrators), and the broader public. Indeed, the interests of teachers in these

issues inevitably entwine occupational concern (over workload) with professional views

as to whether and to what extent class size impacts educational quality. Government

thus has a direct role in bargaining to the extent that commitments sought by the BCTF

impact not only the provincial budget, but also the governments ability to deliver

educational services in a manner consistent with its view of the public interest.19

118. Viewed in this light, it is impossible to conceive of the Bill 28 consultation process

as somehow less meaningful because the BCTF had to make collective representatives

19

Paul Weiler, Reconcilable Differences, Carswell: Toronto, at pp. 227-229.

31

directly to government (with BCPSEA representatives in attendance), instead of only to

BCPSEA who would have in any event been bargaining under a government mandate.

The type of commitments the BCTF sought after BCTF#1 the return of limits on class

size, class composition, and staffing levels across school districts in British Columbia

presented a barrier to the achievement of government policy objectives, for the reasons

explained to the BCTF at the Bill 28 consultation table. The consultation provided

members of the BCTF with an opportunity to directly comment on and attempt to

influence government policy and legislation. Mr. Straszaks offer to combine the

government consultation with collective bargaining also provided opportunity for

changes to the collective agreement as necessary to accommodate agreement reached

in the consultation. [AAB pp. 1228-1232; TEB pp. 304; 405-410]

119. In a broader sense, the trial judges conclusion that s. 2(d) protects Wagner Act

bargaining undermines the very foundation of our current system of labour relations

under the Code and the role of the LRB in its administration. It is the LRB that is

assigned the exclusive jurisdiction to assess complaints of bad faith bargaining under

the Code.20 It does so expeditiously, and the remedies granted in the event of a

successful complaint are (with rare exception) procedural in nature a cease and desist

order, or a direction to the parties to bargain.21

120. In contrast, the trial judge presumes that it is properly the role of the courts to

supervise collective bargaining between parties that are otherwise subject to the Code.

The difficulty such an analysis presents to our current structure of labour relations is

perhaps most evident in the trial judges commentary on the ongoing relationship

between the BCTF and BCPSEA. [BCTF#2, AR pp. 265-266, paras. 542-550] The trial

judge did not find the parameters of bargaining in 2011/2012 to be sufficiently

prescriptive to constitute a separate breach of s. 2(d), but warns that this indistinct line

might be crossed in the future. In that event, unions have a remedy in the form of

lodging a constitutional complaint of bad faith bargaining with the courts even if no

complaint was filed with the LRB, or even where a complaint was filed and dismissed. If

20

Labour Relations Code, ss. 136, 137 and 139(h). 21

Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369, paras. 25 and 63.

32

the trial judges decision on remedies is correct, unions will have an added incentive to

go to the courts rather than the LRB because the court will grant substantive remedies

in the form of the outcome the union hoped to achieve in bargaining.

121. There is no support in Health Services or Fraser for the proposition that s. 2(d)

protects Wagner Act collective bargaining, and indeed such a conclusion is directly

contrary to Fraser. What s. 2(d) protects is a meaningful process for employees to

associate to make collective representations and to have those representations

considered in good faith. In the Bill 28 consultation the BCTF was offered such a

process.

Legislative Removal of Collective Agreement Terms

122. The trial judge does not directly answer the question plainly posed on the facts:

can government legislate collective agreement terms after impasse is reached in

bargaining without infringing s. 2(d)? The question is indirectly answered in the trial

judges repeated reference to mediation and arbitration (but not legislation) as tools

available to resolve bargaining impasse that are consistent with respecting the s. 2(d)

Charter rights of teachers [BCTF#2, AR pp. 191, 256, 290, paras. 142, 483, 681]

123. To the extent the trial judge has found that the legislative alteration of significant

terms in a collective agreement (even one that has expired) is prima facie a breach of

s. 2(d) regardless of the process that preceded the legislation, the result is undeniably

to constitutionalize collective agreement terms. The requirement that the terms be

significant before achieving such status is of limited restraining effect given the

narrowness of the category of terms that Health Services suggests are too insignificant

to attract Charter protection at the first stage of the s. 2(d) test.22

124. This result cannot be reconciled with Health Services and Fraser. It gives

constitutional protection to contractual terms despite the Supreme Court of Canadas

repeated emphasis that s. 2(d) protects process and not outcome. The