The Public Service Health Care Plan (PSCHP) is governed by an Administrative Authority and Partners’ Committee, representing Federal Retirees, active employees and the employer. Decisions about the Plan are made by consensus or, under a Memorandum of Understanding, through binding arbitration.
However, in 2014 the Government of Canada unilaterally changed the cost sharing ratio for retirees’ contributions to the Public Service Health Care Plan (PSCHP) from 75:25 to 50:50. The Retiree Representative at the time reluctantly agreed to the change, to protect vulnerable retirees from rapid and radical cost increases.
The National Association of Federal Retirees, together with a group of representative individual retirees, challenged the Government’s conduct in Federal Court.
The court challenge was triggered by the Government’s change of the cost sharing ratio, but the principles at stake were far greater: formal recognition of Federal Retirees’ collective rights to be represented and to be properly engaged in meaningful consultation in accordance with the law. Ultimately, federal retirees need a strong voice defending their accomplishments and their rights, including their pensions.
On August 1, 2017 the Federal Court ruled on that challenge. The Court’s conclusions can be summarized as follows:
- the PSHCP is not a benefit earned by retirees during their employment
- the PSHCP has nothing to do with collective bargaining for unionized public servants
- the Government has no obligations to abide by past agreements with the Association
- the Association agreed with the 2014 changes, and was not under duress when it did so
- the Government breached no contractual or Charter of Rights obligations
The Court’s conclusions were surprising and alarming. Of particular concern to the Board was the Court's conclusion that the PSHCP did not form part of the employment compensation or the collective bargaining framework that is applicable to the majority of employees in the federal government. This flies in the face of the many years of work and negotiations at the National Joint Council and the PSHCP Partners' Committee and its predecessor organizations.
The National Board of Directors deliberated at length at their meetings in Ottawa September 26-28, 2017 and were thoroughly briefed by our legal team to help them decide whether an appeal of this decision is warranted.
After careful consideration of the reasons for the judgement and of all the relevant facts and law, the Board concluded that the Court's decision was erroneous and on the basis of the legal advice of our counsel, decided that it is in the best interest of the Association and its members to pursue an appeal before the Federal Court of Appeal. That appeal will challenge the Court's decision on the basis that the Judge made errors of law and fact in reaching a decision. This will form the basis upon which we will argue the appeal from the Federal Court before the Federal Court of Appeal.
Members should be assured that neither the Federal Court decision, nor the appeal, affects the ability or commitment of the Association to advocate on behalf of our members and to protect their pensions and benefits. The very fact of our willingness to continue to expend significant Association resources to defend important principles sends a very strong message to the Government. Federal Retirees and its individual branches maintain healthy reserve funding to defend our pensions and benefits and to pursue important legal cases like this.