The Manitoba government's public sector wage-freeze legislation is already interfering in negotiations with workers, even though it hasn't been proclaimed into law, lawyers for the Manitoba Federation of Labour and several public sector unions argued in court Tuesday.

Over two days of hearings, the unions will seek a temporary injunction to stop the provincial government from proclaiming the Public Services Sustainability Act, which was passed in spring 2017, though it still hasn't been proclaimed.

During negotiations prior to the bill's introduction in March 2017, the unions offered alternative solutions to the province's financial challenges, including reducing overtime costs, delaying a cut to the PST or working to negotiate larger federal transfers, said union lawyer Garth Smorang.

Smorang argued the government negotiated in bad faith, because it had already decided to impose wage controls with the legislation.

"The die was cast. There was no open mind," Smorang said.

Even though it's not proclaimed, it's having the effect of being proclaimed. - Kevin Rebeck

Six union contracts either expired before the bill was introduced, or have expired since then, Smorang said.

Employers are using the act to justify delaying negotiations, or imposing wage caps in compliance with the two-year freezes, followed by 0.75 and one per cent in the next two years, said Manitoba Federation of Labour president Kevin Rebeck.

"Even though it's not proclaimed, it's having the effect of being proclaimed," he said.

He pointed to the fact that collective bargaining with health workers hasn't begun. If any employer agrees to wage increases above those set out in the act, the legislation stipulates that those increases must be clawed back by the government, he said.

Smorang says the move violates the freedom of association under the Charter of Rights and Freedoms, and pointed to legal precedents from British Columbia and other jurisdictions.

In 2007, the Supreme Court of Canada overturned a B.C. law which gutted parts of collective agreements for health-care workers. The high court ruled the government interfered in the workers' right to bargaining.

The Supreme Court ruled the government was not prevented from legislating labour provisions but, in essentially replacing negotiated contracts, it had a duty to consult the unions before it acted.

Undermines unions' relationships: lawyer

Manitoba's provincial government will argue its case on Wednesday. In its statement of defence, it says the act respects collective bargaining by not reopening existing agreements and allowing collective bargaining to continue on a variety of workplace issues, such as working conditions, health and safety, and job security.

By taking wages off the bargaining table, however, union lawyer Shannon Carson argues the act hinders the ability of unions to negotiate non-monetary issues by offering wage concessions.

"Monetary issues are pivotal to bargaining power. Parties know when monetary issues are settled, it is almost impossible to leverage other changes," she said.

The act also undermines the relationship between unions and their members, and between unions and employers, she said.

For example, Diagnostic Services Manitoba workers in two bargaining units negotiated wage increases of seven per cent over four years before the act was passed.

A third bargaining unit at Westman Lab in Brandon, though, got stuck with the act's limits because of the timing.

"Those employees are quite frustrated and angry in the workplace. Workplace morale has been very low, and their anger and frustration has been directed at both the employer and the union," she said.

The act also undermines faith in the collective bargaining process, by giving the impression that the government holds all the power, she said.

After Justice James Edmond delivers his decision on the temporary injunction, another date must be set to decide whether the act violates workers' constitutional rights to collective bargaining.

The hearings resume Wednesday morning.