Employment - Federal Statutory. Pearce v. Canada (Staff of the Non-Public Funds, Canadian Forces)
In Pearce v. Canada (Staff of the Non-Public Funds, Canadian Forces) (Ont CA, 2021) the Court of Appeal reviews the function and purpose of the federal Financial Administration Act and the Federal Public Sector Labour Relations Act as they govern federal public service employees:
(1) The FAA: Core public administration and separate agencies
 Employees in the federal public service are governed by a comprehensive scheme that includes statutes, regulations, collective agreements (in the case of unionized employees), and other governmental directives: Bron v. Canada (Attorney General), 2010 ONCA 71, 99 O.R. (3d) 749, at para. 13, citing Vaughan v. Canada, 2005 SCC 11,  1 S.C.R. 146, at para. 1.
 The FAA is part of that comprehensive scheme. It is described as “[a]n Act to provide for the financial administration of the Government of Canada, the establishment and maintenance of the accounts of Canada and the control of Crown corporations.” Subsection 11(1) of the FAA defines “public service” by distinguishing between the “core public administration” of Canada and other parts of the federal administration, on the one hand, and “separate agencies” identified in Schedule V and other designated parts of the federal public administration, on the other hand.
 The “core public administration” includes departments of the federal public service and various agencies, boards, and commissions listed in Schedule I and Schedule IV of the FAA. “Separate agencies,” like the SNPF, are the agencies, boards, and commissions listed under Schedule V to the FAA. The Governor in Council has the ability to move a particular agency, board, or commission from Schedule IV to Schedule V and vice versa: see Christopher Rootham, Labour and Employment Law in the Federal Public Service, (Ottawa: Irwin Law, 2007), at pp. 55-56. Schedule III of the FAA governs Crown corporations, which are not subject to the FPSLRA.
 The distinction between the core public administration and separate agencies is important in this case because the SNPF is a separate agency. Each separate agency has independent status as an employer: Rootham, at p. 58. Other separate agencies include the National Capital Commission, the National Film Board, the National Research Council, and the Parks Canada Agency. Employees in the “core public administration,” by contrast, are employed by the Treasury Board as the delegate of her Majesty in Right of Canada: Rootham, at p. 57.
 There is a sub-class of separate agencies, referred to as “designated separate agencies,” because they have been designated by the Governor in Council under ss. 209(3) of the FPSLRA. There are, at present, only two such agencies, the Canada Revenue Agency and the Canada Food Inspection Agency: Federal Public Sector Labour Relations Act Separate Agency Designation Order, SOR/2005-59.
 Counsel agreed that in establishing separate agencies, Parliament intended them to be more “nimble” than the core public administration, operating like the private sector with respect to their labour relations, and giving them greater flexibility in hiring and firing.
 As an employee of a “separate agency” that had not been designated by the Governor in Council under ss. 209(3) of the FPSLRA, the respondent was a member of a unique class of federal public servants entitled to sue their employer in court pursuant to ss. 236(3) “if the dispute relates to his or her termination of employment for any reason that does not relate to a breach of discipline or misconduct.”
 Subsection 12(2) of the FAA states that, subject to any terms and conditions directed by the Governor in Council, the “deputy head” of a separate agency (usually the chief executive officer), may, among other things: establish standards of discipline and set penalties, including termination of employment, suspension, demotion to a lower position, or financial penalties; and effectuate the termination of employment or demotion to a lower position for reasons other than breaches of discipline or misconduct. Subsection 12(3), which applies to both separate agencies and the core public administration, provides that any such disciplinary action, termination of employment, or demotion may only be for cause.
(2) The FPSLRA
 The FPSLRA deals comprehensively with labour relations in the federal public service. The preamble to the statute expresses the commitment of the Government of Canada to the fair, credible, and efficient resolution of matters arising in respect of terms and conditions of employment. Section 12 provides for the administration of the statute by the Federal Public Sector Labour Relations and Employment Board (the “Board”). Section 13 provides that the Board is to adjudicate certain applications, disputes, and grievances.
 Under ss. 208(1) and 236(1) of the FPSLRA, employees of the federal public service, including employees of separate agencies, are required to follow a grievance process if they are aggrieved by the interpretation or application of any statute, regulation, direction, or other instrument made or issued by the employer, that deals with terms and conditions of employment (ss. 208(1)(a)(i)), or as a result of any occurrence or matter affecting the terms and conditions of their employment (ss. 208(1)(b)). The grievance process is internal, and management personnel determine the merits of the grievance: Bron, at para. 14.
 Employees in the public service who have pursued a grievance up to the final level of the grievance process and are not satisfied with the outcome, are entitled, in certain circumstances, to refer the dispute to adjudication by the Board. However, the path an employee may follow if the grievance is not successful, depends on the nature of the grievance and whether the employee is part of the “core” public administration, a designated separate agency, or an undesignated separate agency.
 Those paths are set out in ss. 209(1), which provides:
209 (1) An employee who is not a member as defined in subsection 2(1) of the Royal Canadian Mounted Police Act may refer to adjudication an individual grievance that has been presented up to and including the final level in the grievance process and that has not been dealt with to the employee’s satisfaction if the grievance is related to In summary, all public sector employees are entitled to adjudication by the Board where their grievance is related to: (a) the interpretation or application of a collective agreement or arbitration award (ss. 209(1)(a)); or (b) disciplinary action resulting in termination, demotion, suspension or financial penalty (ss. 209(1)(b)). Employees in the core public administration are also entitled to refer the dispute to adjudication if their demotion or termination was for unsatisfactory performance or “any other reason that does not relate to a breach of discipline or misconduct”: ss. 209(1)(c). Thus, employees in the core public administration are entitled to refer to adjudication a grievance, relating to the termination of their employment, regardless of whether the reason for their termination was disciplinary or non-disciplinary.
(a) the interpretation or application in respect of the employee of a provision of a collective agreement or an arbitral award;
(b) a disciplinary action resulting in termination, demotion, suspension or financial penalty;
(c) in the case of an employee in the core public administration,
(i) demotion or termination under paragraph 12(1)(d) of the Financial Administration Act for unsatisfactory performance or under paragraph 12(1)(e) of that Act for any other reason that does not relate to a breach of discipline or misconduct, or
(ii) deployment under the Public Service Employment Act without the employee’s consent where consent is required; or
(d) in the case of an employee of a separate agency designated under subsection (3), demotion or termination for any reason that does not relate to a breach of discipline or misconduct.
(2) Before referring an individual grievance related to matters referred to in paragraph (1)(a), the employee must obtain the approval of his or her bargaining agent to represent him or her in the adjudication proceedings.
(3) The Governor in Council may, by order, designate any separate agency for the purposes of paragraph (1)(d).
 Employees of separate agencies, however, can only have their grievances referred to adjudication in limited circumstances. Employees of separate agencies that have been designated by the Governor in Council, under ss. 209(3) of the FPSLRA, may refer their dispute to adjudication if their demotion or termination was “for any reason that does not relate to a breach of discipline or misconduct”: ss. 209(1)(d). Employees of undesignated separate agencies, like SNPF, can only refer their grievance to adjudication by the Board if it relates to the interpretation or application of a collective agreement or arbitration award; or if it relates to a “disciplinary action resulting in termination, demotion, suspension or financial penalty”: ss. 209(1)(a) and (b). The statutory adjudication process is not available for non-disciplinary terminations of employees of separate agencies that have not been designated under ss. 209(3). Those employees are not precluded from access to the courts if they have been terminated for a reason that does not relate to a breach of discipline or misconduct: ss. 236(3). Whereas employees in the core public administration are able to pursue both disciplinary and non-disciplinary terminations by adjudication, employees of undesignated separate agencies have access to the courts for the latter.
 The result is that undesignated separate agencies have greater flexibility to terminate employees for non-disciplinary reasons because they are not subject to a statutory adjudication process that may result in the re-instatement of the employee.
 Section 214 of the FPSLRA provides that, except in those cases that may be referred to adjudication under s. 209, “the decision on the grievance taken at the final level in the grievance process is final and binding for all purposes of this Act and no further action under this Act may be taken on it.”
 Thus, the process available to employees of separate agencies, like the respondent, differs from that available to employees in the “core public administration.” Employees in the core public administration and employees of designated separate agencies, covered by ss. 236(1) and (2), have no right of action in the courts in relation to disciplinary and non-disciplinary terminations. Their right is to proceed to grievance and, in some cases, to have the matter referred to adjudication by the Board.
 Subsection 236(3), on the other hand, gives employees of separate agencies, other than those designated under ss. 209(3), the right to sue “if the dispute relates to his or her termination of employment for any reason that does not relate to a breach of discipline or misconduct.”
 There is no dispute that the appellant, the SNPF, was not a separate agency that had been designated under ss. 209(3).