The union and the employer had a collective agreement providing for a 5% wage increase on October 1, 1993.
The Social Contract Act, 1993 froze public sector compensation but allowed unions to preserve certain increases under s. 24(5), provided they were not merit, cost-of-living, or grid-based increases.
The union elected to preserve the increase.
An arbitrator ruled the increase could not be preserved.
The Divisional Court quashed the award, finding the increase was a simple pay increase that could be preserved, and ordered it paid.
The Court of Appeal upheld the Divisional Court's interpretation on a correctness standard but allowed the appeal in part to remit the matter to a new arbitrator to determine the appropriate remedy.
