I know the conversation is on another site, but I have an account here, not over there.

The CTO is an asshat and the project manager should talk to HR and a company lawyer, as others have pointed out, because of the legal binding contract the employees signed when they were hired that said nothing about being on call.

You then don't force all your engineers to be on call--forcing people who tend to be introverted and on the spectrum are usually better not talking to clients--but offer a bonus to those who agree to be on call.