Back to Work Legislation Ruled Unconstitutional

The back to work legislation imposed by the Federal Government in 2011 was ruled unconstitutional. What does it mean for the 50,000 workers affected? They feel being short changed again.

April 28, 2016. The Canadian Government Act to resume postal services, the Restoring Mail Delivery for Canadians Act, S.C. 2011, c. 17, was ruled unconstitutional by an Ontario Superior Court Judge and further declared having no force or effect.

In layman’s terms, it means the law was struck from the Canadian Government’s legal code. It no longer exists. Too late for those affected. The purpose it was designed for already accomplished.

Mike Palecek, National President of the Canadian Union of Postal Workers (CUPW) believes “This is a win for workers everywhere.”[1]

A closer look at the judgement shows that Mr Palecek took an optimistic look at something that has far-reaching and potentially negative consequences in the greater Canadian mosaic.

The problem is not in defining the infringement as unconstitutional. The difficulty lies in the remedy to the situation. The judged ruled the law was unconstitutional and declaratory relief was a sufficient remedy. In other words, the law was unconstitutional and nothing more. No slap on the hands to the Government. No apology. No compensation for violating a basic right. Nothing. The Federal Government and Canada Post have said nothing in response. They don’t have to. It doesn’t matter.

This is an unfortunate ruling because Restoring Mail Delivery for Canadians Act forced the CUPW members to choose between ratifying an unfavourable new collective agreement proposed by Canada Post or go into Final Offer Selection – a method outlined in the Act that considerably favoured the employer. Given the choice between two bad choices, CUPW members ratified an unfavourable collective agreement rather than gamble on FOS. CUPW and its members liked neither, as both were not the result of the traditional collective bargaining process – a constitutional right the Ontario Superior Court recognised as being denied.

A remedy should have named 2011 collective agreement being null and no effect as well because it is a direct descendant of this Act.

The judge certainly agreed that the Act interfered with CUPW and its members with signing a negotiated collective agreement in 2011. As found at line [194] of the Judge’s ruling;

The Act abrogated the right to strike of CUPW members. The effect of this abrogation was to substantially interfere with – and to disrupt the balance of – a meaningful process of collective bargaining between CUPW and Canada Post. I find accordingly that the Act infringed the s. 2(d) freedom of association of union members and must be justified under. s. 1 of the Charter.[2]

So why didn’t the Judge logically proceed and state, “Yes, the Act substantially interfered with the collective bargaining process, that the Act infringed the s. 2(d) freedom of association of union members, etc., This Act consequently created a forced agreement that would not otherwise have been produced. Since the collective agreement was created out of a framework brought on by unlawful interference, the 2011 collective agreement is of no effect or force. The previous agreement applies until a resolution between Canada Post and CUPW can be properly made within the confines of constitutional guarantees.”

The Judge has the right to impose such a provision in such cases but declined. However, it is known that most section 24(1) remedies are reserved for individual not corporate or collective entities.[3]

J. Firestone took a narrow definition on when a remedy for Section 24(1) would apply:

“. . . a high threshold that applicants must satisfy before a court of competent jurisdiction will award them Charter damages. Something more than gross negligence is required on the part of government actors, although malice is not required to satisfy the threshold. . . [4]
The Supreme Court of Canada has stressed that s. 24(1) remedies exist for the purpose of compensation, vindication, and deterrence in the face of conduct by state actors. There was no conduct on the part of government officials in this case that would warrant an award of Charter damages.”[5]

Firestone believes gross negligence by the Government when violating the Constitution is not considered a trigger for compensation. This only occurs if a Government representative misapplies, misrepresents, or oversteps their boundaries in applying a law. Theoretically then, the Government agent is no longer representing the will of the Government but own self-interests. This is when a remedy then is triggered.[6]

Marilyn L. Pilkington wrote on the topic of damage and remedy when a violation has occurred in La Revue Du Barreau Canadien and concluded that a four step process must occur in determining a remedy and does not dwell on the idea of agent liability:

  • “(1) What are the purposes of the constitutional guarantee?
  • (2) What other remedies are available to redress the infringement of that guarantee? Do they provide an effective means of vindicating the plaintiff’s rights and deterring similar unconstitutional conduct without interfering disproportionately with the implementation of legitimate government policy? Would a remedy in damages achieve these purposes any more effectively, taking into account who will eventually pay?
  • (3) Was the conduct of the defendants so egregious as to warrant punishment through the imposition of damages? Is there any other mechanism available for effective punishment?
  • (4) Has the plaintiff suffered consequential injuries which should be compensated?”[7]

The final ruling fails to answers these questions and falls more on the subjective opinion of the judge.

The reality of this type of application means that the Government can wilfully violate the Constitution with little fear of any consequences, especially as it relates to collective entities such as labour unions, religious organisations, or corporations. When they do violate the Constitution, as per the ruling on Restoring Mail Delivery for Canadians Act, it took almost five years to determine that it was unconstitutional – too late after the damage had been done by the Act. And when it was determined that damage had happened, only a trite recognition was made in a legal sense, but it makes no difference in application to the problem at hand. In the case of the violation to CUPW and its members, there is no apology or compensation to the 50,000 or so people affected.

Not only this, but such a conclusion demonstrates the Government can enact legislation that potentially violates the Constitution and can continue persistently because only those entities that can afford the time, money, or expertise to challenge can bring correction. Even if they do succeed, it may take years to take a violation off the books. And even when that happens, don’t expect the Government to say sorry or compensate for their wrongful actions.

This is a serious weakness in the Canadian system that can lead to an abuse of power which happened in the Restoring Mail Delivery for Canadians Act. There has to be a better mechanism in place to control and remedy such abuses. This should be a warning for Canadians to close this loophole before something worse does come down the pipeline.

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  • [1]http://www.cupw.ca.c.cupw.ent.platform.sh/en/posties-win-big-tory-back-work-legislation-ruled-unconstitutional
  • [2] Canadian Union of Postal Workers v. Her Majesty in Right of Canada, 2016. Court File No.: CV-11-436848. 20160428. The Judgement can be downloaded from here: https://canadasmodernpost.files.wordpress.com/2016/04/cupw-reasons-for-judgment.pdf
  • [3] See Marilyn L. Pilkington. Damages as a Remedy for Infringement of the Canadian Charter of Rights and Freedoms. Osgoode Hall Law School of York University. As found in La Revue Du Barreau Canadien. Vol. 62. 1984. Pg. 543 “Canadian courts may be prepared to permit such a third party to challenge the validity of legislation under section 52 of the Charter, but the opportunity to apply for a remedy under section 24(1) of the Charter is limited to those whose own constitutional rights have been infringed.”
  • [4] IBID Canadian Union of Postal Workers v. Her Majesty in Right of Canada, 2016. Line [241]
  • [5] IBID Canadian Union of Postal Workers v. Her Majesty in Right of Canada, 2016. Line [244]
  • [6]See David Stratas Heenan Blaikie LLP, Toronto, Remedies for 24(1) Violations. http://www.davidstratas.com/15.pdf
  • [7]IBID Marilyn L. Pilkington. Pg. 541
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Posted in Opines

The Community Mailbox Financial Fiasco at Canada Post

CanadaPostCommunityMailboxes4

Canada Post announced in 2013 an estimated annual $400 to $500 million in savings by converting door to door to community mailboxes. It was part of their five-point plan to bring Canada Post into an economically stable future.[1]

However, a change in Government in 2015 halted such plans. They were only able to achieve around 20% of this financial goal.

As at the end of October 2015, we have completed community mailbox conversions for approximately 850,000 addresses across Canada. It is expected that these conversions will contribute an estimated $80 million in annual savings to Canada Post. These were the first conversions of households previously receiving mail at the door and were part of a multi-year national initiative that was to involve up to five million addresses. On October 26, 2015, Canada Post announced that it is temporarily suspending future conversions and will work with the Government of Canada to determine the best path forward given the ongoing challenges faced by the Canadian postal system. As a result, all conversions planned for November and December 2015 and those announced for 2016 were placed on hold.[2]

This is a major change in financial plans by Canada Post. If the company was a publicly traded one, business common sense would immediately require the CEO and board to explain to the shareholders how they would adapt. As of late April 2016, there is no indication by the Government nor Canada Post how they are going to alternatively raise the $320 to $420 million lost in anticipated savings.

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Footnotes:

Posted in Financial

The Call for the Resignation of Canada Post’s President

The Canadian Broadcasting Corporation has posted in-depth coverage of the battle between the new Liberal Government and the Conservative appointed President of Canada Post, Deepak Chopra. Siân Matthews, chair at Canada Post, has written a strongly worded defense for keeping Mr. Chopra at the helm. The response strengthens the present Government’s accusation of their predecessor stocking government boards with party insiders. Matthews was once Stephen Harper’s official agent back in 1993. For more info, click on the following link Canada Post Chair Delivers Sharp Rebuke.

Posted in Opines

Where is Canada Post headed under a Liberal Government?

There is angst among postal workers on what the future looks like under the auspices of a Liberal Government. Nobody knows where Canada Post is heading now that the Conservative vision of community mailboxes has been nixed.

A recent article by Don Pittis posted on the Canadian Broadcasting Corporation’s website, Canadians must say if Canada Post is more precious than junk mail [ Oct 29, 2015] suggests that Canada Post is once again under analysis and a different set of changes could potentially be forthcoming. There is a brief open window, according to Pittis, to consult the Canadian people on what the future of Canada Post should be.

Pittis makes some very good points that the public needs to discuss.

Flyers and admail subsidize a portion of mail delivery. The removal of this medium would increase the cost of delivery to each household. It would be necessary to increase the cost of postage or the corporation to take a loss without flyers or admail.

The idea of alternate day delivery is up for discussion as well. This is not an easy task to fulfill. Canada Post presently does not have the extra room to store any mail in any of their centres for more than a day. Alternate day delivery requires Canada Post to increase their warehouse and logistic facilities all across Canada which could be very costly.

There are three big points that Mr. Pittis overlooked.

The first one is the potential sale of Canada Post. This was not a discussion point during the elections either. It was the previous Liberal Government that had begun prepping Canada Post for privatization and clearly demonstrated at their hiring of Moya Greene as the president. However, her business plan, combined with the 2008 recession, slowed down rather than accelerate privatization. Stephen Harper and his Conservative Government had proceeded with plans for privatization. One of the biggest hurdles he had to overcome was the problematic Canada Post pension plan. It had significant losses from the 2008 recession. This loss combined with the strategy to almost halve the workforce would devastate the defined pension plan. Future employee contributions would not be able to sustain pension obligations. The solution was to change it. Discussions were in the beginning stages on revising the pension plan when the Conservative Government was outed.

Will the Liberal Government stop the restructure of the defined pension plan? It is not known.

Another problem that the Liberal Government has to face is that of the proposed Trans Pacific Partnership deal. The deal severely limits Government state owned enterprises because TPP believes it gives them too great an advantage against private entities. Although the wording of the TPP is not clear and the details are not known, it points to the notion that Canada Post would have to be privatized.

Last of all, the collective agreement between the Canadian Union of Postal Workers and Canada Post expires January 31st, 2016. Will the Liberal Government fulfill its promise of better relations with employees, or will it legislate workers back to work imposing a new deal?

What is the future of Canada Post? The next six months to a year are going to be interesting.

Posted in Opines

The Future of Canada Post… Parcels

Where is Canada Post heading? Another report about the transformation of Canada Post. This time by By Sean Davidson, CBC News, October 17th, 2015. It is a start but does not go deep enough into the history, politics, or economics behind the decision making. He does suggest that if the Liberals win the election, it may be status quo with the modern post blueprint of cutting jobs and converting to Community Mail Boxes from home delivery. A coalition with the NDP could upset the current direction. http://www.cbc.ca/news/canada/canada-post-election-1.3274346

Posted in Opines | Tagged , , ,

Canada Post President Defends Blueprint

In December, 2013, Canada Post’s President and CEO, Deepak Chopra appeared before a Canadian Parliamentary committee to defend his blueprint for Canada Post’s future. The blueprint is naturally supported by the ruling Conservative Government, and criticized by the NDP opposition. Paul Dewar, an NDP MP, spent 5 minutes questioning Mr. Chopra on the changes. Mr. Chopra refused to engage in answering any of the questions and instead chose to forward his vision of Canada Post through short quotes. The following is the actual exchange captured on television and re-transmitted on YouTube. Mr. Dewar comes across as a person with his own personal axe to grind. However, the response by Mr. Chopra is very indicative of the business model he employs, secrecy. He, as modeled by the majority Conservative Government, do not feel it is the duty of a public servant to be clear and transparent with the citizens on any major decision making.

Posted in Opines | Tagged , , ,

A Review of Canada Post’s Five Point Plan

Canada Post’s Five Point Action Plan is the second iteration of the modern post business plan. The first version, which started in 2008, was unsuccessful and this new one adds the elimination of door-to-door delivery to bring it back to profitability.

This is not the typical business blueprint for future growth. It is a survival plan.

The Five Point Action Plan available at Canada Post’s website has no author, nor any endorsements by any leading corporate or government figures. Nobody, including the president of Canada Post, wants to take direct ownership for this document.

Declining volumes are partially to blame for the present predicament but there is an important variable completely left out — the Canada Post Transformation program is a financial disaster, or at minimum a boondoggle. The Government, employees, or the public have to pay for this poor business strategy.

It won’t be the Government who will pay for this. Lisa Raitt, the Minister Responsible for Canada Post, has made it clear in a September 2013 CBC interview that the Canadian Government has no intention of offering direct financial assistance. She believes that the company must be self-sustaining at almost any cost. She has not publicly recognized any responsibility, whether directly or indirectly, of Government involvement in the transformation program that has led up to the debt crisis. She cited the Conference Board of Canada’s Report, The Future of Postal Service in Canada, as justification for any future changes to Canada Post.

This same report is highlighted in the Five Point Action Plan; the Future of Postal Service in Canada urges a fundamental change in Canada Post business model. This was reviewed previously by Canada’s Modern Post, and was found to be very limited in its scope. It was recently revealed by the National Post that Deepak Chopra, President of Canada Post, is a board member of the Conference Board of Canada — a potential conflict of interest. It appears this was the beginning framework for a spin campaign to justify the new business plan.

In 2007 Canada Post was uniquely positioned for the future — an aging workforce that could be reduced through attrition, little to no debt, a pension plan that was in good shape, and an infrastructure in need of updates. It was ripe for change with minimal negative effect. They could have easily reduced the workforce by 12% under the old system, restructured routes and transportation systems, and would have been able to save roughly $500 million a year through this without any major revamping. It likely could even be more if sound business practices were introduced throughout the network.

Canada Post knew volumes were declining when they chose to start the $2+ billion in upgrades — with money that they envisioned through future profits. However they had absolutely no cash reserves in case something went wrong and it did go wrong. The markets crashed in 2008. They had no profits and no money. Government intervention through loans and an issuing of bonds helped ease the crisis but this left the corporation straddled with serious debt.

See A Brief History of Canada’s Postal Transformation for more information.

Why they put so much money into revitalizing infrastructure for a product that was known to be declining is a mystery. Canada Post could have simply started the slow process of winding down its mail processing system to a much smaller footprint to reflect decreasing demand.

Why couldn’t Canada Post have just sharpened the saw under the old system, built up their cash reserves so that if a rainy day came, or wanted to upgrade, pay for it in cash?

If they had the cash, they could have tested the modern post initiative in a single city or region to test its viability first before a national roll-out. This was never done.

In the last year, Canada Post was looking at alternate day delivery as a cost saving solution. Many Canadians seemed open to this idea. There were some problems with this scenario. The cost of expanding warehouse space to hold alternate day mail would be expensive. The high volumes of mail that occur during Christmas could also not be sustained in an alternate day model. It would have to revert to once a day to keep up during this period. The corporation would also not be able to guarantee businesses that their goods would reach their customers at a committed time, which would mean businesses would look for alternative carriers. It would also require a change to the Canadian Postal Service Charter.

The phasing out of door-to-door delivery and the use of CMBs is more cost-effective and fits within the Canadian Postal Service Charter. This was the reason why CMBs were chosen.

The installation of CMBs combined with the stiff hike in the cost of postage is a serious threat to Canada Post’s future. It may accelerate the shift to electronic communications. The negative publicity may urge the public to use alternate delivery forms for parcel delivery too. There may be a sudden 30 percent drop or more in volumes and in related revenue because of this change. Does the corporation have a strategy if this happens?

There is a serious logistical problem of where these CMBs will be located. Most public sidewalks in residential areas do not have room to safely accommodate such a large piece of equipment. Many homeowners will oppose the stationing of this object in front of their property. Canada Post will have to work with communities and local governments for setting up these boxes on urban streets. It will be time consuming and generate negative publicity. It may take more than five years for some neighbourhoods along with numerous consultations to allow for this installation. Some neighbourhoods may choose to permanently refuse or not cooperate at all. This is going to be a logistical nightmare.

By switching to CMBs, this will significantly reduce the letter carrier workforce. This will mean that there will be excess inventory of new vehicles and buildings recently leased by Canada Post. There will be an oversupply problem. Modern Post Version 1 will become a partial write-off.

Labour attrition was one of the key elements of the first version, but the profits were not realized from it. The present second version attempts to revive this same concept.

The loss of 6,000 to 8,000 positions is of great concern. The concentration of losses will be in the letter carrier sector. A smaller percentage will be supervisors, clerks, middle managers and streamlining in the plant operations. There were approximately 15,000 full time and 1,000 part time letter carrier routes at Canada Post in 2011 — though there has been some reductions in the count since then. It is uncertain how many positions the plan will eliminate since delivery to homes represent only 33 percent of the total points of call according to the Five Point Action Plan document (Pg. 5), or corrected to 71 percent by Jay Bryan of the Montreal Gazette in his article Canada Post Plan is a Disaster — regardless of what percentage door-to-door requires more labour than the other methods. The elimination of this method may reduce the letter carrier workforce anywhere between 40 and 50 percent.

The Five Point Plan outlines that 15,000 employees will be retiring in the next five years, but it fails to point out that this is company wide, not just letter carriers. It may require anywhere from 5,000 to 7,000 letter carriers to retire in order for this attrition to work. If there are not enough letter carriers retiring during this period, it is unknown how this will work out.

The reduction of 6,000 to 8,000 positions also has a negative effect on the pension and will cost the corporation more money. With less contributors subsidizing the plan, Canada Post as a corporation is forced to pay more into it. It is not known how much this will cost Canada Post.

The Five Point Action Plan reveals upcoming changes to the pension plan itself. In a December 13th letter sent to the Hon. Jim Flaherty, Minister of Finance, Denis Lemelin, President of CUPW, outlined that the pension is part of the negotiated collective agreement and no unilateral changes can be made by any party. He questions if the reprieve is contingent on changes to the pension plan and if these changes are going to be imposed by the Government rather than through the collective agreement process.

It is the employees and the public that will have to pay for version 1 of the modern post and its current successor. Employees have to suffer job losses and a decline in benefits. The public loses its home delivery, faces increased prices, and receives less services.

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