Can a government legislatively freeze its employees' wages?

UPDATE:  Here is a video from the Agenda of two labour lawyers discussing Bill 115 and the Charter implication.
A lot of attention is on the teacher’s situation in Ontario right now, and the highly unusual and very complicated Bill 115 introduced yesterday by the Ontario Liberals. That Bill does a lot of things, one of which is freeze teacher wages for a couple of years and fix other terms, thereby rendering collective bargaining over those issues futile.  The law firms and blogs will no doubt be absorbing and analyzing the Bill in the days and weeks to come.  Look for yet another Charter challenge coming down the pipes.
I was interviewed by CBC Radio earlier, and they were interested in the Premier’s comments that an across the board public

sector raise freeze of the sort the Conservative Party is proposing would violate the Charter, but the wage freeze imposed on the teachers in Bill 115 does not. For new labour law students just entering class, let’s think about that for a moment.
B.C. Health Services (2007)
The story begins in 2007 with B.C. Health Services,  a case in which the B.C. government did something similar to what the Ontario Liberals are doing now:  pass a law that fixes conditions of employment and bans bargaining about important issues in the future.
The Supreme Court of Canada ruled that the B.C. government had violated Section 2(d) of the Charter (granting everyone the freedom to associate).  Since Section 2(d) guarantees workers a right to engage in meaningful collective bargaining in good faith with their employer, a law that effectively prohibits bargaining over key issues amounts to substantial interference with the Constitutional right to collective bargaining.  The SCC said this in B.C. Health:

B.C. Health Services: Laws or state actions that prevent or deny meaningful discussion and consultation about working conditions between employees and their employer may substantially interfere with the activity of collective bargaining, as may laws that unilaterally nullify significant negotiated terms in existing collective agreements.

This case seems to say that governments could not legislatively freeze raises of unionized workers.   That view seemed to be confirmed by the SCC in the 2011 decision in Ontario v Fraser (at para. 37).
Association of Justice Counsel v. Canada (Summer 2012)
Now flash forward to earlier this summer.  The Ontario Court of Appeal released its decision in Ass’n of Justice Counsel v. Canada (AG). That case challenged federal legislation (the Expenditure Restraint Act) that set a cap on raises for government lawyers.  An arbitrator later imposed those capped percentages, and the lawyers’ union challenged the legislation as a violation of Section 2(d).  They lost at the OCA.  How?
The OCA said that Section 2(d) protects only a process of collective bargaining, and not any particular outcome and not a right to strike.  In this case, unlike in the B.C. Health Services situation, the union and the employer had engaged in extensive bargaining over wages prior to the wage-fixing legislation being enacted.   Some 16 bargaining sessions had taken place, and another 5 days of mediation with one of Canada’s top mediators.  After all this bargaining, the parties had reached an impasse.
According to the OCA, once the workers have had a fair chance to present their collective representations to the employer, and the employer has received those representations and responded to them in good faith, ‘freedom of association’ has been satisfied.   Employers are not required to bargain indefinitely into the future.  At some point, the Constitutional duty to bargain expires, and here it had done so.  The Court summarized its finding as follows:

Ontario Court of Appeal: Further negotiation may be possible after the constitutionally protected phase of the process of bargaining has concluded but that possibility, a remote one on the facts of this case, does not expand the scope of the protected right. Fraser makes clear that s. 2(d) has limits: it does not guarantee any dispute resolution process after the parties have reached an impasse and it does not guarantee any particular outcome. In my view, the validity of the ERA must be assessed on the basis of whether, at the time it was enacted, the parties had had the opportunity for a meaningful process of collective bargaining. If they had, s. 2(d) is satisfied. The faint hope of further negotiations in the shadow of a dispute resolution mechanism not protected by s. 2(d) cannot expand or extend the reach of s. 2(d) beyond its core guarantee.

This decision appears to provide a road-map for governments on how to impose wage freezes or wage fixing legislation, or  any other collective agreement term, without running afoul of the Charter, does it not?
It seems to find that, as long as a government employer sits and listens to public sector unions’ bargaining proposals, nodding along and offering the odd comment here and there, it can then eventually walk away from the table and legislate whatever contract terms it wants.
UPDATE:  The SCC refused leave in this case.  So, watch for every anti-union government in Canada to begin a process of going through the motions of bargaining with public sector unions, followed by a declaration that they are unable to reach a deal, followed by legal imposition of a collective agreement on whatever term the government wants.   And, possible, say goodbye to meaningful collective bargaining in the public sector.  Is the private sector next?
[Back to the original post] If that position is affirmed by the SCC on appeal, then whatever benefit the labour movement thought it had achieved in B.C. Health Services will have been swiftly swept away.  But it is far from clear what the SCC will do with Association of Justice Counsel decision.  It will be decided in the context of other cases moving up the judicial ladder that raise the keystone issue of the right to strike or to access a neutral dispute resolution process.  At the end of the day, the most important question is what options are available to workers when bargaining reaches an impasse.  Note that even in normal collective bargaining under regular labour relations law in Canada, such as the Ontario Labour Relations Act, an employer can engage in ‘hard bargaining’, where the employer meets, discusses proposals, but refuses to offer the unionized employees anything.  That’s lawful in Canada, but normally the solution to hard bargaining is a strike.  In the case of the teachers, the government has removed that option so that it can just impose whatever it likes.  That’s why the real issue that will determine whether Section 2(d) of the Charter actually provides any real benefit to workers will depend on whether freedom of association includes a right to strike or to access to a neutral third party arbitration process when bargaining reaches an impasse.  The Liberals (and the Conservatives) don’t think the teachers should have access to any of those options.  If the Charter permits governments to simply impose whatever terms they want, and to ban strikes and lockouts and prohibit access to neutral and fair arbitration processes when bargaining reaches an impasses, then we are right back to where we began–freedom of association as an empty vessel.

Would that be a good result in your opinion?  Or should ‘freedom of association’ include a right to have bargaining disputes determined by a system of neutral arbitration or a right to strike?
Given this background, can you see why Premier McGuinty is arguing that a legislated wage freeze as applied to teachers is not a violation of the Charter, but that a general across the board wage freeze imposed on all public sector workers would be a violation?
Do you agree with his position?