Federal government breaches duty to bargain in good faith 


October 2013

Employment and Labour Bulletin
Stefanie Di Francesco, student at law

The ongoing challenges which employers face in the current economy are highlighted by the decision in Professional Association of Foreign Service Officers v Treasury Board, 2013 PSLRB 110, where the Public Service Labour Relations Board ("Board") found that the Treasury Board ("Employer"), breached its duty to bargain in good faith. In particular, the Board held that the Employer acted improperly when it sought to impose pre-conditions on arbitration in conjunction with collective bargaining with the Foreign Service Officers union ("Union").


Collective bargaining between the Employer and the Union reached an impasse when the Union attempted to negotiate wage parity between members of the bargaining unit and their counterparts in other federal government occupational groups. The specific groups which the Union sought parity with were legal advisors, economists, and commerce officers.

When the Union was in a legal strike position, the Union, out of concern for the magnitude of the strike's impact on the Canadian economy, suggested that the parties resolve the dispute by submitting to binding arbitration under the Public Service Labour Relations Act ("Act").

The Employer accepted the offer subject to certain conditions, namely, the Employer sought to prevent the Union and, in turn, the arbitration board from utilizing comparisons to the three identified occupational groups. Although the Union accepted some of the other conditions proposed by the Employer, the Union was not prepared to accept the comparator condition and proceeded with strike action.

positions of the parties

Before the Board, the Union argued that, by refusing to allow the use of the relevant occupational groups as comparators, the Union's position on wage parity was untenable. As such, the Union argued that the Employer breached its duty to bargain in good faith by attempting to predetermine the Board's decision on the issue.

The Employer argued that since the Act does not contain express restrictions as to the conditions either party can impose with respect to arbitration, it was acceptable to only proceed with an arbitration process on whatever terms the parties agreed to. For this reason, the Employer argued that either party could propose any conditions on the referral of a dispute to arbitration.


The Board confirmed that parties considering submitting a dispute to arbitration (under the Act or otherwise) are expected to deal with each other throughout the entire process in good faith. As such, the parties must enter into serious, open and rational discussions with the real intent of entering into a mutually acceptable collective agreement.

The Board also held that the duty to bargain in good faith is defined by the manner in which the parties conduct themselves during the bargaining process. If a party's conduct is not conducive to the full exchange of positions, by virtue of that conduct, the party has breached the duty to bargain in good faith.

With respect to the conduct of the Employer, the Board found that the conditions it proposed, if accepted by the Union, prevented the Union from having a rational discussion about the Union's position on wage parity. Therefore, by putting forward conditions which the Employer knew or ought to have known could not be accepted by the Union, the Employer exacerbated the impasse between the parties, acted in a manner that was not conducive to a full exchange of positions, and, consequently, breached the duty to bargain in good faith.

employer take-aways

As enunciated by the Board, employers and unions considering submitting a dispute to arbitration for resolution mutually owe one another a duty to bargain in good faith. However, adhering to that duty and proposing conditions on arbitration are not mutually exclusive. The Board's decision is not a blanket prohibition on conditions.

Instead, employers must balance the duty to act in good faith and the obligation to come to the bargaining table with a willingness to engage in serious, open and rational discussions against the desire to place conditions on arbitration. Before asserting conditions, employers should consider: (1) the union's position; (2) the impact the desired condition will have on the Union's ability to fully express its position with respect to the relevant bargaining issues; and (3) whether it would be reasonable for the union to decline the condition without breaching its duty to bargain in good faith.

by George Waggott

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2013