Manitoba court upholds Charter damages award on province’s meddling with U of M faculty negotiations

Manitoba’s highest court dismissed the government’s appeal of a $19.4-million award compensating University of Manitoba professors for the province’s secret intervention in their contract negotiations. This move led to a strike on campus in 2016.

In the Court of Appeal of Manitoba decision released July 13, the three-member panel ruled the $15 million compensatory damages award - plus lost wages, interest, and court and strike costs - “addressed all three functions of Charter damages-compensation, vindication and deterrence.”

“The appeal court agreed with the lower court ruling that there was “an established Charter breach in this case,” says Kristin Worbanski of Myers LLP, which acted for the Manitoba Federation of Labour. “It was a breach that warranted the novel remedy of compensation.”

Right to association breached by intervention

The federation had argued that the University of Manitoba Faculty Association’s right to association, under Sec. 2(d) of the Charter had been breached by interfering in its negotiations with the university. 

It wanted compensation under Sec. 24 (1), which says, “Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.”

“There haven’t been too many cases that have awarded these constitutional remedies,” Worbanski says, adding the trial judge applied the test set out by the Supreme Court of Canada in Vancouver (City) v. Ward for determining when damages were just and appropriate to award.

Myers’ partner Garth Smorang noted that monetary compensation is “what courts can do” when Charter rights are breached. “You could ask the government to apologize, but what is that worth in the context of vindication and compensation?”

Upholding a February 2022 trial court ruling, appeal court Justice Diana Cameron, who wrote the ruling, said she was not convinced by the province’s argument that the trial judge “erred in law or made a palpable and overriding factual error.

“Manitoba alleges that the trial judge made errors of law and of fact in reaching her ($19.4 million) conclusion… I disagree and would dismiss the appeal,” Cameron wrote.

Court of King’s Bench Justice Joan McKelvey had earlier ruled Manitoba was on the hook for compensating proposed wage increases for academics and administrators at U of M that didn’t come to pass because of the interference by provincial bureaucrats. 

The award includes $15 million for one-time payments to faculty members employed between April 2016 and March 2020 to address lost earnings due to interference, $1.6 million for wages lost amid picketing, and $2.7 million to the union for strike-related expenses.

Former Pallister government’s desire to curb public sector wages

Smorang says the union’s dispute with the province came after the Conservative government of Brian Pallister came to power in early 2016, when the academics’ union was negotiating with the university. The association and the university came to an agreement that it was necessary to boost the pay scale to attract and retain talent to the university, which ranked low among large Canadian universities.

The result was a proposal from the university for an overall wage increase of seven percent over four years or a 17.5 percent hike when market adjustments were considered. Despite a strike vote, Smorang said talks were generally going well. A mediator even came to get a settlement hammered out before a strike deadline.

However, these negotiations “came on the radar” of the province, which was concerned because any negotiated wage increase could set a precedent for other public sector workers, such as nurses, who were about to start talks.

Unbeknownst to the faculty association, Smorang says, the government “told the university two things – we’re ordering you to take the offer off the table completely, and replace it with zero percent increase over one year, and two, you can’t tell the union about it.”

Smorang said the university resisted, saying it was bad faith bargaining, especially late in the process and with the province wanting to keep its role secret. U of M balked, Smorang says, but ultimately did take back the offer when the mediator came to Winnipeg four days before the proposed strike date.

However, the university did disclose that the government was behind the new offer and even showed the union and mediator that “the president of the university had written to the Premier the day before pleading with him not to do this because it would be illegal and disruptive to the relationship between the university and its unions.” The U of M president never received a response.

The faculty association went to the Manitoba Labour Board with its concerns and was awarded more than $2.4 million, with the added costs bringing the figure to over $2.8 million. The trial judge later reduced the latter amount.

Smorang adds that, several months later, the government even tried to suppress wages for public sector workers, passing wage restraint legislation. That law was challenged by 28 unions, under the leadership of the federation, on constitutional grounds that their bargaining rights were infringed.

“We went to court with a two-pronged approach,” Smorang said, “the larger issue of the wage freeze legislation and the specific issue of interfering with negotiations at the University of Manitoba.”

The lower court found in favour of the unions on both issues. However, the government later won its appeal of the negative decision on the wage freeze legislation, with the higher court saying it was constitutional given the current law in Canada.

The federation then requested leave to appeal to the Supreme Court of Canada on that ruling but was denied.

However, the appeal court in Manitoba agreed with the trial judge on the U of M issue, saying that Charter rights were breached. The case returned to the trial judge, who issued her award ruling in February 2022.

Opening the door to more Charter damages

The province has until the end of September to request a follow-up appeal, should it take the case to the Supreme Court of Canada.

A government spokesperson has said the province will “thoroughly and carefully review the court’s decision,” noting the government was entirely successful on the main constitutional issues in the broader litigation. It also “respects” the appeal court’s finding on the “much narrower” issues around the University of Manitoba situation.

Both Smorang and Worbanski say the decision doesn’t just apply to labour and employment issues.

Section 24 (1) “applies to all kinds of breaches under the Charter,” says Smorang, with Worbanski adding that the ruling, while not binding on other provinces’ courts, “is important in opening the door further in terms of charter damages as a remedy.”