Friday, 10 May 2013

Sometimes the Government Cannot Defend Itself

On January 31, 2013, Fiona Johnstone won her discrimination case against the federal government at the Federal Court (Canada v. Johnstone). Many legal experts expect that the government will not appeal the decision even though it has the potential to adversely affect every employer in Canada. In this case, the government has failed to fully defend its own interests and has thereby failed to protect the interests of other affected Canadians.

Johnstone complained to the Canadian Human Rights Commission in 2004 because she was unable to maintain full-time employment status due to her rotating shift schedule and ensuing difficultly securing childcare. Without full-time employment status, she was ineligible for workplace benefits. The Canadian Human Rights Tribunal (Tribunal) found that due to this ineligibility, Johnstone was the victim of an employment policy that discriminated against her on the basis of family status—i.e. having children requiring childcare.

The Federal Court affirmed the Tribunal’s decision that Johnstone’s childcare schedule should have been accommodated by her government employer, the Canadian Border Service Agency (CBSA). Effectively, the decision means that Johnstone has a right to benefits and a job that fits the time constraints of her personal life. It also demonstrates that both Johnstone and the court expect others—in this case, Johnstone’s employer and fellow employees—to shoulder some of the burden of Johnstone’s life-choices.

Robyn Benson, head of the Public Service Alliance of Canada, called this ruling “a huge win for Canadian workers with family obligations”, and that “it is now clear that employers must carefully consider each and every family status accommodation request and accommodate [those requests] short of undue hardship”.

It is unsurprising that organized labour would gleefully endorse this ruling—it greatly expands employer obligations to employees. But if Benson’s assessment proves accurate, employing young workers (particularly women) with family obligations will become more complicated and costly. This is why this decision will ultimately backfire and not have the desired effect of preventing future discrimination because instead of protecting the interests of young workers with family obligations, this ruling encourages employers to find subversive and clandestine means to ignore the job applications and advancement requests of otherwise qualified young workers since hiring and promoting those workers is now associated with greater risk and higher costs.

What has been the government’s response? In cases like this, the government cannot be trusted to fully defend its own interests in court because it has an insufficient incentive to put up a good fight. Moreover, lacking sufficient incentive, the government may mount a less than rigorous defence because the financial burdens associated with an unfavourable court decision are ultimately borne by the taxpayers.

In defending its interests against Johnstone’s human rights complaint, the government advanced three arguments. First, that the term “family status”, as used in the Canadian Human Rights Act, should not be construed to include childcare obligations. Second, that Johnstone had not satisfied the prima facie test for discrimination. And third, that the tribunal lacked the authority to order the remedies it awarded to Johnstone. These arguments—although interesting to lawyers—do not truly strike at the heart of the matter, especially from a private employer’s perspective.

The government did not argue that Johnstone has no legal right to receive workplace benefits, that human rights legislation should not be used to force others to bear some of the costs of Johnstone’s personal life, that Johnstone was requesting preferential treatment, or that a victory for Johnstone would be a setback for employees with childcare obligations. Although each of these runs contrary to existing and established precedent, private employers had an interest in these arguments being advanced in court.

Of the arguments the government did advance, none addressed whether human rights legislation can or should provide the basis for a positive rights claim, or, in other words, whether the legislation could be used to force a defendant to expend his own resources to provide some good or service to the claimant. No where did the government argue that human rights legislation should not be used as a means of transferring the costs of an individual’s chosen lifestyle to other members of society—in this case, from Johnstone to her employer, her fellow CBSA employees, and ultimately, taxpayers.

A private employer would have defended himself vigorously against Johnstone’s complaint because that employer would directly bear the financial burden of losing the case. The court’s decision means that every employee with childcare obligations in circumstances similar to Johnstone’s must receive accommodation from employers short of undue hardship. This greatly complicates an employer’s task of generating an employee work shift schedule, as a particular segment of employees have effectively been given trump cards permitting them to avoid working undesirable shifts. Even more, this decision not only restricts employer freedom, it also has a negative impact upon employees who do not have childcare obligations since it is these employees who will be scheduled to work the undesirable shifts.

But the government does not bear its own financial burdens the way that a private employer does. A ruling, regardless of the result, would have no direct impact upon the financial bottom-line at the CBSA since it is operated by the government and funded by taxpayers. Further, since it is the government’s legislation that enabled Johnstone to make a complaint, government lawyers were unable to argue that the law is unconstitutional, poor policy, or that it produces absurd results. In other words, not only did the government lack incentive to defend itself fully, it may have had an interest in advancing an incomplete defence to preserve its own legislation.

There are other examples of when the government cannot mount a rigorous or complete defence. On April 26, 2010, five applicants sued the Canadian and Ontario governments for failing to develop an effective housing strategy to deal with “inadequate and high-priced housing” (Tanudjaja v. Canada). The applicants are advancing a positive rights claim asking the courts to force taxpayers to fund their lifestyles. The Attorneys General of Canada and Ontario have filed motions to dismiss the application. And like the Johnstone case, should this application proceed, both government defendants will be incapable of mounting a complete defence.

For example, one argument unavailable to the governments’ lawyers is that the governments’ own policies and regulations are the primary cause of inadequate and high-priced housing. Economists Edward L. Glaeser, Joseph Gyourko, and Raven E. Saks answer the question posed by the title of their own paper, “Why Have Housing Prices Gone Up?”, with,
“…the evidence points toward a man-made scarcity of housing in the sense that the housing supply has been constrained by government regulation as opposed to fundamental geographic limitations.”
And as long-time Governor of the Reserve Bank of New Zealand, Donald Brash said in his introduction to the 2008 Demographia survey,
“…the affordability of housing is overwhelmingly a function of just one thing, the extent to which governments place artificial restrictions on the supply of residential land.”
Although this may be a controversial proposition in the discipline of urban planning, notice that no government that already places “artificial restrictions” on residential land supply could defend itself by advancing Brash’s argument in court. To do so would be to undermine its own interventionist programs. Instead, in the Tanudjaja application, the Federal and Ontario governments will be forced to justify their levels of interference in the housing market rather than address what Brash thinks is the root of the problem.

Of course, this will suit the five applicants’ positive rights claim well. As long as the arguments before the court concern only the adequacy of the governments’ housing policies and not whether governments should interfere in the housing market, the debate will not address the fundamental problem—that “artificial restrictions” drive-up housing costs. The prevailing assumption shared by all parties to the Tanudjaja application will be that government interference in the housing market is justified and perhaps necessary. No one will suggest that the court undergo a thorough examination of how government intervention creates housing shortages and high prices, despite that it would be in the interests of taxpayers to do so.

The Johnstone and Tanudjaja cases are excellent examples of litigation where the government has an insufficient incentive to defend itself rigorously and completely. In both cases, the government is defending itself against a positive rights claim. In every positive rights claim advanced in court, the claimant is asking that his or her actions be indemnified by the defendant. When such a claim is made against a private defendant, that defendant has a significant interest in defending himself since he will bear the costs of losing. But this is not true for governments.

Governments do not bear the financial burdens associated with an adverse court decision in the same way that a private defendant does. When a positive rights claim is successful against a government defendant, the costs associated with that unfavourable ruling are dispersed across a broader segment of society and ultimately borne by taxpayers (for another example, see Moore v. BC). In essence, the government merely functions as a conduit passing on to others any new burdens it receives.

There are two obvious problems resulting from this. 

First, when the government is defending itself from a positive rights claim, taxpayers have an interest in the outcome because ultimately they will have to bear the cost of an unfavourable decision. If the government—for whatever reason—fails to fully and completely defend itself, taxpayer interests have not been duly represented before the court. 

And second, since every court decision has a precedential value, as similar adverse decisions accumulate over time, the body of case law will become more and more skewed in favour of a claimant advancing a positive rights claim.

This piece was first published by the C2C Journal April 23, 2013.