freedom of association – Double Aspect

Modern Mailmen

Back-of-the-envelope thoughts on what the history of postal services and their competitors can teach us about the regulation of social media

This post is co-written with Akshaya Kamalnath[*]

One of us (Akshaya) recently visited the Postal Museum in Washington DC. Looking at the historical development and role of the postal services in the US brought to mind our modern forms of communication—social media platforms—and their value, especially in terms of free speech. We often associate free speech with the press but, as a quote by Nat Hentoff in the Postal Museum informs visitors, it was the post that brought news to the press and then brought newspapers to the public.

Today, social media platforms like Facebook, Twitter and Google (YouTube) play a role similar to that of the postal service by acting as intermediaries for communication. They are, in a sense, the high-tech descendants of the postal services. The post physically transports letters and parcels from one person to another, while Facebook electronically transmits speech that one person wants to convey to others. The tech platforms have just made it easier to convey messages to a number of people at once. Tech platforms also help transmit news content—just like the post delivers newspapers. In fact, the use of postal services to deliver newspapers was considered the most important information technology in the late 1700s.

As lawmakers are talking about regulating speech on social media platforms, a comparison with postal services is instructive. The postal service is not required or even allowed to scrutinize people’s mail and make decisions about whether or not to deliver it. So why should its technologically more advanced relatives have to identify and remove misinformation or statements supposed to be “hate speech”? Of course, social media can be used to commit crime, including engaging in hate speech as defined in the criminal law of some countries including Canada. The post collaborated with law enforcement where necessary to investigate fraud and other criminal activities and social media companies should do the same. Social media companies should obviously comply with court orders if someone is found to have committed a crime. The issue is whether they should be expected to engage in preventive enforcement.

The further question about whether we should require these tech platforms to service all users equally, like the postal service is expected to, is more complicated. This is because the dominant postal service is usually run by the state, while the tech platforms like Facebook are run by corporations in the private sector. While we can ask a state-run enterprise to provide services to all equally, more thought needs to be given before private enterprises are held to the same standard. Yet, government regulation is being considered because, among other things, there are complaints about the spread of what activists deem to be “hate speech”, and also complaints about the silencing of conservative voices on social media.

Overall, we have to tread carefully with government regulation. In addition to interfering with their freedom of expression and association, heavy-handed regulation of online platforms would have the effect of making it harder for new and, at least initially, smaller players to enter the social media market, which ought to be the real solution to the concerns about the existing platforms’ behaviour. It will be highly unlikely that we see university students create the next Facebook or Google from their dorm rooms or garage if regulation becomes burdensome.

The history of the postal services can again serve as a warning to resist government-backed monopolies, which Facebook and the few other social media giants can in effect become if government regulation becomes burdensome. It is telling that the Postal Museum makes no mention of Lysander Spooner who tried to set up a private postal service in 1844.

Spooner argued against state monopoly over the postal service, saying:

The present expensive, dilatory and exclusive system of mails, is a great national nuisance—commercially, morally and socially. Its immense patronage and power, used, as they always will be, corruptly, make it also a very great political evil.

He added (referring to the US Constitution’s First Amendment protection for free expression) that

any law, which compels a man to pay a certain sum of money to the government, for the privilege of speaking to a distant individual, or which debars him of the right of employing such a messenger as he prefers to entrust with his communications, “abridges” his “his freedom of speech”.

Although Spooner’s business was eventually forced to close by a tightening of legislative protections for the government post’s monopoly, it had the temporary impact of bringing down the cost of postal services.

Government regulation requiring Facebook and other social media platforms to set up a complex decision-making system to enforce restrictions on what messages they can be used to convey will increase the cost of operating such platforms. Any new platform will be required to spend heavily on human moderators, artificial intelligence systems capable of assisting them, or, likely, a combination of the two. While established platforms like Facebook will not find it difficult to invest in complying with such regulations, the cost will be prohibitive to outsiders who want to set up competing social media platforms. This should explain why Mark Zuckerberg, CEO of Facebook, is in favour of government regulation.

Heavy regulation of speech on social media also runs the risk of government using social media to their political advantage—a modern version of the political abuses of the power over the transmission of ideas that Spooner denounced, which we are already seeing in some countries. In France, it emerged that the President’s office circulated a doctored video on social media, despite the President himself being committed to censorship of “fake news”. In Austria, a politician asked Facebook to take down a post calling her a “lousy traitor of the people”, a “corrupt oaf” and a member of a “fascist party” none of which amounted to hate speech under Austrian law.

The converse possibility, regulation requiring Facebook and other platforms to host all users irrespective of their opinions, would also be problematic, because it would infringe the platforms’ ability to hold and act on their own views, as well as to provide an environment in which they think their customers will be happiest. Just like restaurants may ask misbehaving patrons to leave so others may enjoy their dinner, social media platforms should be able to decide where to draw the line so that a large majority of their users are able to enjoy the platform. Or, to return to the postal analogy, suppose a private delivery company insisted on reading the letters or examining the content of the packages we wanted it to deliver for us and refuse to deliver those it deemed morally objectionable. The appropriate response for a person who did not want his or her letters read, or who submitted to the exercise and had a letter rejected, would be to go to a competitor—or to establish one, like Spooner did—rather than to force his message on a party unwilling to deliver it. Similarly, when Facebook or other online platforms set out standards with regard to the type of content and members it will allow, they make specific choices as private actors, and should be free from the government’s interference.

All this is not to say that the large social media platforms should do nothing to address the problems associated with their use. Companies like Facebook are under pressure from their shareholders and consumers. Facebook’s shareholders recently demanded a change in management since the current management had not dealt with misinformation and hate speech. Even though Mark Zuckerberg holds the majority voting power in the company, the shareholder proposals convey a message. Facebook’s management is aware of the market pressures and has taken a number of measures, including releasing its public content-moderation rules and a proposal for an independent body to hear appeals regarding decisions by Facebook regarding content moderation. (That said, presumably, the independent body would still be working under guidelines that Facebook has drafted or at least is in agreement with.)

While not perfect, these are voluntary responses to market sentiment against problems of misinformation and censorship that big social media companies have chosen to invest in. Facebook’s taking such measures does not preclude a new company from starting a modest platform without having to invest in these systems at the outset. As they get bigger, the new competitors could devise their own solutions on different principles, rather than having to follow a pattern imposed by legislation, not only enacted at Facebook’s suggestion but, quite possibly, drafted based on its proposals. Just like new courier companies have differentiated themselves from postal services based on GPS tracking, expedited delivery or convenient package pick-up options, new social media companies may exploit gaps especially if the big social media companies preclude certain views on their platforms.

[*] Dr Akashaya Kamalnath is a corporate and insolvency law scholar. She is currently teaching at Deakin University, but will be joining the Auckland University of Technology Law School shortly. You can read her papers here, and follow her on Twitter.

Stupid but Constitutional

More on why I think legislation forcing floor-crossing legislators to run in by-elections is not unconstitutional

In my last post, I asked whether there is a right to rat—whether member of Canadian legislatures have a right under the Canadian Charter of Rights and Freedoms to cross the floor and join the caucus of a party different from the one for which they were elected, without going through a by-election first. I argued that there is no such right, although the bans on floor-crossing, such as the one that exists, and is now being challenged before the courts, in Manitoba are a bad idea. Somewhat to my surprise, that post provoked a good deal of discussion on Twitter (relative to my other posts, anyway, which to be fair is a pretty low standard). Because of the time difference, the fun mostly happened while I was asleep, and I missed out, so I want to follow up here.

One question that was raised, by Emmett Macfarlane, is whether I sufficiently addressed the floor-crossers’ “freedom”, under section 2(d) of the Charter, to associate with the caucus of their choice (and indeed a party caucus a right to associate with them)”. I’m not sure how much more I can say on this point; there seems to be a fundamental disagreement between prof. Macfarlane and me here. As I see it, no one is prevented from associating with a caucus, nor is a caucus prevented from associating with anyone. Only a preliminary condition is imposed: that before undertaking a (formal) association, the floor-crosser be elected under that caucus’s party label. The floor-crosser is put in the same position as any other citizen—one cannot become a member of a caucus, even if both sides are agreed, unless one first gets elected. (Consider the case of an unsuccessful candidate: he or she would very much like to be part of the caucus, and the caucus would love to have him or her, but those dastardly voters get in the way. ) Similarly, even if engaging in collective bargaining is a constitutional right, as the Supreme Court now claims it is, I don’t think that even the Supreme Court would say that the requirement that the union have the support of a majority of workers before it is able to impose itself on their employer is a violation of the freedom of association, although it is doubtless a pre-condition that gets int the way of people engaging in associational activities.

Second, prof. Macfarlane remains of the view that the floor-crossers’ constituents rights to effective representation under that courts have read into section 3 of the Charter are infringed when their representatives are “restricted from representing [them] by responding to political circumstances that leads them to believe joining another caucus is the best way to do that”. I do not think that the right to effective representation has ever been taken to go nearly as far as prof. Macfarlane wants to take it here. In a passage from Haig v. Canada, [1993] 2 SCR 995 later endorsed by the majority in Figueroa v. Canada (Attorney General), 2003 SCC 37, [2003] 1 SCR 912, Justice L’Heureux-Dubé spoke of a

right to play a meaningful role in the selection of elected representatives who, in turn, will be responsible for making decisions embodied in legislation for which they will be accountable to their electorate. (1031; underlining in Figueroa at [25])

In other words, the right protected by section 3, both as a matter of constitutional text and even in the Supreme Court’s cases that have arguably expanded it to some extent, concerns the process of elections. As the majority put in Figueroa, it is “the right of each citizen to a certain level of participation in the electoral process”. [26] Section 3 does not deal with what happens within the legislature once the elections have taken place.

If the courts were to expand the scope of section 3 in this way, they would become entangled in all manner of questions that have always been thought of as a matter of politics—for example, whether the whip or a party line gets in the way of “effective representation”. (And I don’t think that parliamentary privilege, of which more shortly, will save them. Privilege attaches to the functioning of legislative bodies, not political parties or even caucuses.) Jan Jakob Bornheim pointed out to me that that’s precisely what happens in Germany, where the Basic Law‘s provision making members of the Bundestag “responsible only to their conscience” (article 38) has been interpreted to prohibit the imposition of party lines. For my part, I don’t think it’s a good idea to involve the courts in these issues, and I doubt that Canadian courts are all that keen to take on this responsibility, in the absence of a reasonably clear textual requirement that they do so.

In addition to all of that, I think that we should take seriously the role that party affiliation plays in people’s voting behaviour, and acknowledge that many, and probably most, voters will feel that their representation is undermined, not enhanced, by the ability of a representative whom they chose (in large part, if not exclusively) because he or she was the candidate of one party to switch, mid-term, to a different party. Prof. Macfarlane suggests that this amounts to “using a reality of voting behaviour to transform the core purpose and function of” a legislator “which isn’t to represent a particularly party to but to represent a constituency”. For my part, I wouldn’t want a constitutional doctrine that is oblivious to “realities of voting behaviour” in the name of some high-minded pursuit of politics as it ought to be rather than as it is. In any case, I don’t think the distinction between the roles of representative of a party and representative of a constituency are as sharply distinct as prof. Macfarlane suggests. A legislator elected under a partisan banner can, and indeed is expected to, represent a constituency as a partisan (not in every way, of course, but in much of what he or she does), and really don’t see how the Charter gets in the way of that, or why it should.

The final question I will address here is whether any of this matters, or whether the whole thing is a matter Parliamentary privilege anyway, and the courts will not interfere with the way in which privilege is exercised. On this point, I think there is some confusion going on. The internal functioning of legislative bodies is a matter of privilege, as are the rules they make, internally and for themselves, such as their standing orders. That, as Benjamin Oliphant noted, the standing orders of Canadian legislatures deny independent members some important rights that they grant to those belonging to political parties (and thus arguably undermine their constituents’ right to effective representation) is a matter of privilege and not subject to Charter review. But the issue we are concerned with does not arise out of standing orders or an exercise by the Speaker of the Legislative Assembly of that body’s self-governing powers. It concerns the constitutionality of a statute enacted pursuant to one of the province’s legislative powers (namely that in section 45 of the Constitution Act, 1982, to legislate in relation to the constitution of the province), to be part of the law of the land, and not merely the law and custom of Parliament. The exercise of this legislative power is obviously subject to the Charter; as section 52(1) of the Constitution Act, 1982 provides, “any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect”.

Now, as the Court of Appeal for Ontario explained in Ontario (Speaker of the Legislative Assembly) v Ontario (Human Rights Commission), (2001) 54 OR (3d) 595 at [35], although the constitutionality of legislation in relation to the functioning of a legislature or one of its components is subject to the Charter, to the extent that this legislation calls for self-application by the legislature or its Speaker, the courts will not interfere with decisions made pursuant to that legislation. (This principle, known as the right of “exclusive cognizance”, is an aspect of privilege.) So, for instance, in the case of Manitoba’s ban on floor-crossing, it will be for the Speaker (I assume) to enforce the rule that “a member who … [has] cease[d] to belong to the caucus of that party during the term for which he or she was elected … must sit … as an independent and is to be treated as such”, and the courts will not call into question the Speaker’s decisions about what that entails. But the question of the constitutionality of that provision is a prior and separate one, and the right of exclusive cognizance does not apply to that question.

In short, although they are not immune from constitutional scrutiny because of Parliamentary privilege, bans on floor-crossing are not unconstitutional. They infringe neither the freedom of association nor the right to vote (or to effective representation) protected by the Charter. Once more, to say that such bans are constitutional is not to say that these bans are a good policy. I think they are ineffective (because they cannot prevent a would-be floor-crosser from voting with his new friends), and useless, because voters can always get rid of a representative they don’t like at the next election. One might even say that these bans are stupid—stupid but constitutional, as the late Justice Scalia used to say.

The “Unequal Bargaining Power” Trope

Defenders of trade unions generally, and of constitutional protections for union rights, notably the right to force an unwilling employer into collective bargaining and the right to strike, usually invoke the “unequal bargaining power” of workers and employers in support of their position. The Supreme Court relied on this claim when it constitutionalized the right to collective bargaining in Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1, [2015] 1 S.C.R. 3, and the right to strike in Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, [2015] 1 S.C.R. 245. In Mounted Police, the majority claimed that

Without the right to pursue workplace goals collectively, workers may be left essentially powerless in dealing with their employer or influencing their employment conditions. … Individual employees typically lack the power to bargain and pursue workplace goals with their more powerful employers. Only by banding together in collective bargaining associations, thus strengthening their bargaining power with their employer, can they meaningfully pursue their workplace goals. [68, 70]

The problem with this statement is that it is simply not true. I said so here and in a National Post op-ed. But you don’t have to take it from me. Take it from the economist Bryan Caplan, who has a detailed, point-for-point reply to an “unequal bargaining power” argument over at EconLog. Hard as it is to resist the temptation to copy and paste the whole thing here, I’ll content myself with just two quotes:

Everyone talks as if bosses have the better end. But talk is very different from action. If everyone were trying to start their own businesses and hire workers, that would count as “acting as if bosses have the better end of the deal.” Most workers, however, make no effort to become entrepreneurs. You could object that most workers don’t have the money to open their own businesses, but most rich workers make no effort to become entrepreneurs either.

And:

Most workers in the U.S. aren’t in unions. Most aren’t even close to being in unions. Yet most U.S. workers earn well above the minimum wage. A simple supply-and-demand story can explain this. [The “unequal bargaining power means unions are necessary”] story doesn’t.

Please, please, please read the whole thing ― and pass the link on to a Supreme Court judge the first chance you have. Thank you!

Error-Correction

I have a new post at the CBA National Magazine’s blog, which follows up on my posts (here and here) arguing that the Suprme Court’s recent decisions constitutionalizing a right to collective bargaining and a right to strike were bad mistakes. In National Magazine post, I review the various ways in which these mistakes might be corrected or mitigated: invoking the notwithstanding clause, re-litigating the issue, and constitutional amendment. I argue that the notwithstanding clause, despite being quick and easy fix, should not be resorted to. The other solutions should be attempted, despite their difficulty and uncertainty.

Check Their Privilege

In my post criticizing the Supreme Court’s recent decisions in Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1 and Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, which constitutionalized rights to collective bargaining and to strike, I suggested, without elaborating, that they are inconsistent with the Supreme Court’s jurisprudence in that they constitutionalize organized labour’s economic rights and impose constitutional burdens on private parties. In this post, I want to develop this argument a little more.

The framers of the Charter chose not to include economic rights in our constitution ― neither the old-fashioned property rights and freedom of contract, nor the newer “social and economic” rights such as a right to housing, healthcare, or a pension. And, generally speaking, the Supreme Court has been extremely reluctant to protect anyone’s economic rights of either sort under the Charter. For instance, in Siemens v. Manitoba (Attorney General), 2003 SCC 3, [2003] 1 SCR 6, the Supreme Court held that “[t]he ability to generate business revenue by one’s chosen means is not a right protected under s. 7 of the Charter” [46], while in Gosselin v. Quebec (Attorney General), [2002] 4 S.C.R. 429, 2002 SCC 84, it refused to find that s. 7 required governments to provide welfare.

Now I have argued, here and elsewhere, that the failure to protect property and contract rights has been counter-productive, leaving the marginalized and the poor at the governments’ mercy, even as the well-off can use their political connections to avoid shakedowns. “Social and economic” rights are probably different, because ― as the majority of the Ontario Court of Appeal pointed out in a recent case where housing rights were alleged to be protected by s. 7, Tanudjaja v. Canada (Attorney General), 2014 ONCA 852 ― there are no judicially discoverable or manageable standards for courts to apply in such matters. Be that is it may, it is quite clear that Canadian constitutional law, as it now stands, recognizes no economic rights of any sort ― with one glaring exception.

That exception concerns the economic rights of unionized workers. The Mounted Police majority clearly recognizes ― although it does not quite acknowledge ― that the right to bargain collectively which it reads into s. 2(d) is an economic one. As it puts it,

[i]ndividual employees typically lack the power to bargain and pursue workplace goals with their more powerful employers. Only by banding together in collective bargaining associations, thus strengthening their bargaining power with their employer, can they meaningfully pursue their workplace goals. [70]

“Workplace goals” here is, quite clearly, a bit of a fig leaf. The judges may not understand the economics, as I’ve argued in my previous post ― they may be ignorant of the fact that nobody in a competitive labour market (or any other competitive market) has much bargaining power, and that employees are not under some special disability. But they surely understand that the “workplace goals” employees pursue are about compensation, whether it takes the form of a higher salary, greater fringe benefits, or even more leisure. So there you have it: employees are entitled to constitutional protection for their ability to get more money out of employers ― by means of cartelizing their output and eliminating competition.

The question is, why them? Why are employees given a constitutional privilege which freelancers, small businessmen or, for that matter, welfare recipients are not? The Court’s assumption seems to be that employees are uniquely vulnerable, but surely they are not more so than the people on welfare. And even businessmen can have a hard time making ends meet, in the face of competition. This, indeed, is their favourite argument for forming cartels of their own. You know the story: competition is too cut-throat, we need to limit the number of companies operating in a market, yada-yada. Let’s license restaurants, prohibit foreign law firms from operating in our jurisdiction, or just divide up the market, stop competing, and make everybody ― except the consumers of course ― happy. What is there, in the Supreme Court’s logic, that would have prevented the confectioners who thought you weren’t paying enough for your chocolate from arguing that they had a constitutional “right to join with others to meet on more equal terms the power and strength of other groups or entities” (Mounted Police [66]) ― such as the consumers? Score one for labour lawyers ― the Bay Street types, presumably, just hadn’t thought of making the argument.

Then again, I suspect that the Supreme Court wouldn’t have gone along with it, coming from a cartel of businesses. What about other forms of associations? Does, say, a religious community have a right to force a government to bargain with it, in good faith, about tax credits? Or do the members of a coalition of taxpayers have a right to strike, constitutionalized in Saskatchewan Federation of Labour ― to stop paying taxes ― as part of an exercise in joining with others to meet on more equal terms the power of the most powerful entity of them all, the government? Am I being facetious here? Well, yes, somewhat. But really, what does “the right to join with others to meet on more equal terms the power and strength of other groups or entities” mean, as applied to groups other than trade unions?

Unlike the other two aspects of the freedom of association identified in Mounted Police, namely “the right to join with others and form associations; [and] the right to join with others in the pursuit of other constitutional rights,” [66] this “right to join with others to meet on more equal terms the power and strength of other groups or entities” seems to be simply inapplicable to any association other than a trade union. It is not a right in which all citizens can share, but a privilege granted, for reasons unexplained, to a single group in Canadian society. As such, it should not exist.

This unique privilege has a counterpart ― a unique burden imposed on one group only. Generally speaking, the Charter does not apply to private parties. By its own terms, it binds governments and legislatures alone. Yet the invention of a right to collective bargaining imposes a constitutional obligation to engage in it ― on employers. This is done indirectly, to be sure, since strictly speaking, the constitutional duty is that of legislatures to create a labour law regime which, in turn requires employers to bargain collectively. Still, the relationship between the constitutional requirement and the private party who must bear its burden is straightforward, and without obvious parallels in the Charter realm. I suspect that the fact that government ― which is subject to the Charter in all its capacities, including both as regulator and as employer ― is in fact the employer in these cases might have obscured the fact that the Supreme Court’s decisions ended up imposing Charter duties on private parties, but that’s hardly a good excuse for the Court’s muddled thinking. (It does make me wonder whether the Charter ought to apply to the government as an employer at all, but that’s a question for another time.) The Court doesn’t distinguish between the rights of government employees and those of private firms, and the correlative obligations of their respective employers, and there is nothing in its reasons that would support such a distinction.

In short, in addition to being based on economic myth and misconceiving the Court’s role vis-à-vis legislatures, the decisions constitutionalizing labour’s economic rights are out of step with the Court jurisprudence denying such rights to all other Canadians, and that which refuses to impose Charter obligations on private parties. It erects labour as a privileged class in Canadian society, endowed with greater constitutional rights than others. This is wrong. I will consider the options for remedying the situation shortly.

Laboured Thoughts

Over the last few weeks, the Supreme Court re-wrote yet another part of the Constitution ― this time, the Charter’s freedom of association provision. Section 2(d) now means that labour unions have a constitutional right to participate in a “meaningful process of collective bargaining,” created in Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1, and in many if not in all cases, to strike in order to achieve their goals within that process, created in Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4. After the first of these decisions, Omar Ha-Redeye wrote that “everything we thought we knew” ― everything, that is, that the Supreme Court itself had been telling us ― “about labour law in Canada and s. 2(d) changed.” And then, a couple of weeks later, it changed some more. Mr. Ha-Redeye’s posts, over at Slaw (here and here), set out, with some sympathy if I read him right, the labour law story. In this post, I want to say something about the assumptions behind that story. As will quickly become obvious, for my part, I have no sympathy whatsoever for what the Court has done.

The foundations of the Supreme Court’s freedom of association jurisprudence, and especially its recent decisions, are shaky in several respects. I will skip over its cavalier approach its own recent precedents, which Mr. Ha-Redeye describes, pointing out that “when the law and interpretation of the constitution shifts so drastically, it also leads to some very creative legal writing,” including an “interpretation of existing case law” that is “open to dispute.” Geoff Plant, at Plant’s Rant, has also criticized the court (here and here) ― harshly and, in my view, with good reason. I, instead, will focus on the Court’s economics, methodology, and view of its own powers.

The Court’s utter failure to understand the economics of trade unionism taints its interpretation of the s. 2(d) right. The Court believes that “[w]ithout the right to pursue workplace goals collectively, workers may be left essentially powerless in dealing with their employer or influencing their employment conditions” (Mounted Police, para. 68). Trade unions, and the imposition on employers of a duty to bargain with them, are in its view required to redress this imbalance of power. This is simply not true. A majority of workers in Canada are not unionized. Are they all at the mercy of their employers, unable to obtain reasonable employment conditions? Of course not. At the very least, judges ought to be aware that Bay Street lawyers ― including associates ― are not exactly starving because they are not unionized. Nor are, say, executives, or the employees of Google. In a competitive market, an employer will not be able to impose unfair employment conditions on workers, no more than the buyers of goods are able to impose their conditions on the sellers. Sure, the labour market is not perfectly competitive. But nor is any other. The Court does not even attempt to explain why the labour market is somehow uniquely unbalanced.

Admittedly, it is true that in a competitive market, a worker by himself has almost no ability to “influence his employment conditions” ― but the exact same thing is true of the employer. Employment conditions for a given category of worker, like the price of any good in a competitive market, are those at which the market reaches equilibrium. They are outside the control of anyone ― worker or employer. So the Court is right to say that trade unions are necessary to give workers power to influence their working conditions. But that’s because in order to give anyone such power, the labour market must be distorted and made uncompetitive. This is exactly what trade unions do, by cartelizing labour supply and reducing the competition between workers that helps, like competition between suppliers in any market, keep the prices at equilibrium. In economics terms, labour unions extract monopoly rents from their employers ― who, of course, pass on the cost to consumers, if the employer is a private firm, or to taxpayers, if the employer is the government. (Another consequence of the artificially inflated cost of workers which the unions create is, as in any other market, the demand for labour goes down ― in other words, fewer workers will be employed. The Court seems to be blissfully unaware of this.)

Now some labour markets may be particularly uncompetitive. For instance, for some jobs, the government is (almost) the only employer, and might be able to exercise a monopsony power to drive down the price it pays for labour below what it would be in a competitive market. For these specific occupations, there might be a case for a prima facie right to bargain collectively, though even there, the costs it generates might be such that restrictions to that right would be well justified. But they are exceptions, and cannot justify extending, as a matter of constitutional law, a right to bargain collectively, and to strike, to all workers.

This discussion leads me to a second problem with the basis of the Supreme Court’s section 2(d) jurisprudence, which I referred to, above, as a methodological one ― its lack of grounding in the sort of social science evidence which it has been favouring in some of its recent decisions, such as Canada (Attorney General) v. Bedford, 2013 SCC 72, [2013] 3 S.C.R. 1101. As support for its claim about the purported imbalance of bargaining power, the Court cites not some economic study, but an almost-octogenarian decision of the U.S. Supreme Court. Indeed, the lengthy list of “authors cited” in the Court’s two recent decisions (which includes citations by the dissenters as well the majority opinions) consists largely of labour law scholarship, with a sprinkling of industrial relations studies, and not a single economics one. It is bad enough when judges, in Richard Posner’s words “duck, bluff, weave, change the subject” because “they don’t understand the activity from which a case before them has arisen” (Reflections on Judging, 85-86). But it is worse when think they understand it, but are in fact, proceeding on the basis of ideas that are little better than folklore. To quote Judge Posner once more, “[w]e need evidence-based law across the board, just as we need evidence-based medicine across the board, and not a combination of scientific and folk medicine” (62).

Now the Court is probably not alone to blame for this state of affairs. If the governments that were defending their approaches to labour law failed to adduce relevant economic evidence, or indeed any economic evidence, they missed an opportunity to force the Court to consider it. Moreover, at the s. 1 justification stage, the governments did not press cost considerations as the objectives behind the statutes whose constitutionality was challenged, focusing rather on the need for effective service delivery. Perhaps they had a sense that merely financial reasons would not be regarded as sufficient to justify infringements of rights. And indeed they often shouldn’t be. But the cost of union rights is a different matter than, say, the expense of printing ballot papers which courts surely could, under s. 3 of the Charter, require a government to incur.

That’s not so much because of the amounts in issue, but because making the Court consider the cost of its decisions would have required it to confront the third, and perhaps most fundamental problem with its reasoning ― its misapprehension of its constitutional role. As Justices Rothstein and (in Saskatchewan Federation of Labour) Wagner point out, labour law involves balancing competing interests, which is something legislatures are often better than courts at doing. But the issue is, if anything, even more fundamental. To the extent that public sectors unions are involved ― and they are the ones who drove the litigation that led to these decisions, and their main, if not their only, beneficiaries ― one of the competing interests is that of the taxpayers. The Supreme Court’s intervention in the field of labour law makes public sector workers much more expensive to employ which, at least in the short and medium term, means substantial public expenditures. The issue is not simply one of institutional competence. It is one of basic legitimacy. Allowing the citizens’ elected representatives to decide how they will be taxed, and how their money will be spent is, at least historically, the first and most basic function of a democratic constitution. Charles I lost his head over this issue, James II his crown, and Britain, its American empire.

Still, institutional competence matters too, and indeed it is directly connected to the issue of democratic legitimacy. As the Supreme Court itself had recognized in Irwin Toy Ltd. v. Quebec (Attorney General), [1989] 1 S.C.R. 927,

[w]hen striking a balance between the claims of competing groups, the choice of means, like the choice of ends, frequently will require an assessment of conflicting scientific evidence and differing justified demands on scarce resources. Democratic institutions are meant to let us all share in the responsibility for these difficult choices. Thus, as courts review the results of the legislature’s deliberations, particularly with respect to the protection of vulnerable groups, they must be mindful of the legislature’s representative function.

The idea that legislatures are entitled to some deference (the extent of which, admittedly, has never been made very clear), in making decisions involving a balancing of competing claims, especially competing claims on scarce resources, has been a recurrent ― and perhaps a strengthening ― theme of the Court’s jurisprudence since then.

The defenders of the Courts’ rulings might argue that unions, perhaps especially public sector unions, are in fact “vulnerable groups,” and that the need to protect them against the government’s depredations justifies setting aside the deference to which governments might otherwise be entitled. Perhaps that’s what the Court thinks, given its acceptance of the imbalance of power myth. But experience (which, admittedly, it would be best for governments to support with empirical evidence!) disproves this idea. Public sector unions have frequently been able to hold governments to ransom, and obtain, in exchange for “labour peace,” substantial benefits and advantages for their members. This makes perfect economic sense, of course. Governments aren’t giving away their own money, but taxpayers’, when accede to the civil servants’ demands. Moreover, by paying civil servants with fringe benefits and pensions, they are able to do so relatively untransparently, and often to peddle to cost to future generations rather than imposing it on current voters. But to the extent that current voters have to pay, the government, unlike a firm selling its products on a competitive market, can make them pay more or less as much as it asks. The idea of civil servants’ unions as vulnerable groups, or “discrete and insular minorities,” is groundless.

The Supreme Court’s recent decisions on the scope of s. 2(d) of the Charter are based on economic myths, unsupported by appropriate evidence, and derogate from the Court’s normal constitutional role. They are also inconsistent with the Court’s jurisprudence in other ways, notably in that they constitutionalize organized labour’s economic rights and impose constitutional burdens on private parties, something I will discuss separately. They call for a response, and indeed a reversal, in one way or another ― something I will also discuss separately. In the meantime, they need to be denounced, loud and clear.

Food for Thought

Some thoughts on the position of public sector unions, from that great union-buster, Franklin Roosevelt:

All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws … Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.

Something, perhaps, for Canadian courts to ponder as they consider union challenges to the federal government’s attempts to limit their powers.

A different ERA?

The ERA – the the Expenditure Restraint Act, S.C. 2009, c. 2, s. 393 – is actually the same that was at issue in Association des Réalisateurs c. Canada (Procureur Général), 2012 QCCS 3223, which I blogged about a month ago. But the conclusion of the Ontario Court of Appeal in Association of Justice Counsel v. Canada (Attorney General), 2012 ONCA 530, is different from the one Québec’s Superior Court reached in Réalisateurs. The two cases are alike, however, in being very much about the specific facts at issue.

As I explained in the post about Réalisateurs,

In Réalisateurs, the ERA operated retroactively to modify an agreement concluded between the union and CBC/Radio-Canada. The court found that an interference with the union members’ Charter right to engage into a meaningful collective negotiation over fundamental conditions of their employment (which, it went on to hold, which not justified by s. 1 of the Charter).

The situation in Justice Counsel is different. By the time the ERA came into force, the union and the government had not yet concluded a collective agreement. Despite lengthy negotiations, they had been unable to agree, and decided to resort to arbitration. In these circumstances, the Court holds, “the ERA had the effect of taking wages off the table for the arbitration, [but] that does not, standing alone, amount to an infringement” of the right to negotiate collectively (par. 39). That right entails an ability to make representations, which must be listened to in good faith, but no particular outcome need follow, and binding arbitration is not constitutionally required. The union was able to make representations over the course of the negotiations, and the negotiations’ failure is no proof that they were not listened in good faith. On these facts, the ERA didn’t take away from the union anything it had a right to.

The decision is thus quite narrow, because the circumstances of the parties involved are unusual. It does not tell us very much about the ERA‘s constitutionality as applied to other unions. In my post about Réalisateurs, I criticized the courts for not showing sufficient restraint in extending constitutional protection to civil service union contracts. What I had in mind were the substantive rules applied in these cases. But here is another mode of judicial restraint: deciding a case on narrow – but relevant – facts, and avoiding broad issues altogether.

No Resraint

The Superior Court of Québec issued a potentially far-reaching decision last week, declaring a number of provisions of the Expenditure Restraint Act, S.C. 2009, c. 2, s. 393, constitutionally inapplicable to the CBC/Société Radio-Canada. In Association des Réalisateurs c. Canada (Procureur Général), 2012 QCCS 3223, justice Lise Matteau held that the application of provisions limiting salary raises that could be offered to civil servants to Radio-Canada’s employees was a violation of their right to freedom of association, protected by s. 2(d) of the Charter.

The Expenditure Restraint Act sets out upper limits on the extent of pay raises that the government and a number of crown corporations are entitled to grant their employees, as part of a package of measures responding to the global economic crisis and the ensuing budgetary difficulties. Provisions of collective bargaining agreements stipulating higher raises are invalid to the extent that they exceed the limits allowed by the statute, whether the agreement was entered into before or after its enactment. This means that the statute retroactively changes some collective agreements, including those of concluded by the plaintiffs in Association des Réalisateurs.

This, they said, deprived them of their right to engage in meaningful collective negotiations with their employer over the terms of their employments, in violation of s. 2(d) of the Charter as interpreted by the Supreme Court. Justice Matteau accepted this submission. Salary questions are key to the employees’ relationship with the employer and thus being able to negotiate on them is essential for the plaintiffs’ collective-bargaining rights to be meaningful. By setting aside the agreement reached between the plaintiffs and their employer, the Expenditure Restraint Act infringes on their right to collective bargaining.

The next question the court had to decide is whether the infringement was justified under s. 1 of the Charter. Although the plaintiffs challenged the government’s claim that the Expenditure Restraint Act addressed pressing and substantial concerns, Justice Matteau accepts it, given the context of economic crisis and budgetary pressure in which it was enacted. However, she holds that the application of the statute to CBC/Radio-Canada’s agreements with its employees is not rationally connected to the objective of reducing expenditures and controlling the salaries of the public sector employees. That is because the government financing of the CBC/Société Radio-Canada does not depend on the contracts it negotiates with its employees. The government gives the CBC a lump sum of money, and the corporation decides what to do with it. Cutting or limiting the growth of the CBC’s payroll does not change its lump sum subsidy and thus doesn’t help the government’s finances.

This seems like the correct result in light of the Supreme Court’s s. 2(d) jurisprudence, although I am far from being an expert in this area. But, assuming that the decision is indeed correct, it helps illustrate just how troubling that jurisprudence is. The problem is not so much the decision itself. If the court’s analysis of the CBC’s financial relationship with the government is right, there seems to be relatively little reason for imposing salary restraints on the CBC’s employees, except perhaps the rather speculative claim that, if allowed to raise its salaries as it pleases, the CBC will end up asking for – and obtaining – unaffordable financing increases from the government.

But the more troubling question is whether courts should be policing propriety of Parliament interference with collective agreements between the government and civil servants in the first place. I think that a consideration of the institutions involved and the rights at stake suggests a negative answer.

Consider, first, the institutions. Suppose a civil servants’ union challenges the Expenditure Restraint Act. As applied to actual civil servants, it presumably is rationally connected to its objectives. So the court hearing the case will need to proceed to further stages of the s. 1 analysis – asking itself whether the restrictions it puts in place are minimally impairing of the s. 2(d) right and whether its beneficial effect outweigh the deleterious ones. Can it do so? Are courts really in a position that the limits on negotiating salaries that Parliament imposed were as little as possible? Although some comments made in obiter by Justice Matteau suggest that it would have been enough for the government to consult the unions, I wonder whether this is so considering that, after the consultation, Parliament still went ahead and imposed binding legislation. Deciding whether this legislation really was minimally impairing requires, it seems to me, analyzing the government’s budgetary situation, which is not something the courts are equipped for doing. And quite apart from institutional competence, there is the question of who, as a matter of legitimacy or political morality, ought to control government spending. The Stuart kings asserted the power to do so – and Charles I had his head cut off for his troubles. Since then, nobody has seriously challenged Parliament’s power of the purse. Is the Canadian judiciary prepared to do so?

It might be said that, when rights are at stake, it should. And, to be sure, enforcement of Charter rights sometimes results in the courts, in effect, requiring the government to make expenditures – in the area of language rights for example. But what sort of rights are at issue here? Courts say it is about a meaningful freedom of association. But the effect of the judgments in Association des Réalisateurs is to prevent Parliament from interfering with a private contract (between the CBC and its employees). Now that might be a good thing if you believe in freedom of contract. But it is clear that the framers of the Charter made a fundamental, deliberate choice not to protect economic rights – property and freedom of contract. This decision – and the Supreme Court’s jurisprudence from which it is derived – seems to say that trade unions have a constitutional right that no other Canadian has. Whatever one thinks, substantively, of the merits and demerits of unions, their being more equal than the rest of us this ought to be troubling.

Although the expression is often overused, I think that this is an area in which judicial restraint is really called for. I suppose the government will want to appeal the decision in Association des Réalisateurs. Perhaps the Supreme Court will yet have an opportunity to show some.