In Ontario English Catholic Teachers Assoc. v. His Majesty, the Ontario Superior Court of Justice found Bill 124 to be void and of no effect after a number of Unions challenged its constitutionality.

In June 2019, the Ontario Government introduced the Protecting a Sustainable Public Sector for Future Generations Act, 2019, commonly known as Bill 124 (“Bill 124”). Its most material provision limited salary and compensation increases for approximately 780,000 workers in the public and broader public sector to 1% per year for a three-year moderation period.

The three year moderation period for unionized workplaces began at the expiry of any collective agreement that was in force on June 5, 2019.   As a result, Bill 124 has run its course for some bargaining units, while others have not yet been subject to the 1% per year limit. You can learn more about Bill 124 here.  

Not surprisingly, many unions challenged the constitutionality of Bill 124. These challenges were heard by the Ontario Superior Court of Justice over ten days in September.

The various unions argued that Bill 124 violated the freedom of association, freedom of speech and equality rights under the Canadian Charter of Rights and Freedoms (the “Charter”). The Ontario Government denied that Bill 124 infringed on these rights and, in the alternative, argued that if it did infringe on any Charter rights, it was still permissible to enact Bill 124 because it was a reasonable limit on those rights.

While the Court found that Bill 124 did not violate the rights of freedom of speech or equality, it found that Bill 124 substantially interfered with collective bargaining, thereby violating the right to freedom of association under section 2(d) of the Charter.

In its decision, the Court stated that Bill 124 substantially interfered with collective bargaining when, among other things, it prevented or restricted compensation from being discussed as part of the collective bargaining process. Bill 124 was found to prevent collective bargaining for wage increases of more than 1%. This restriction resulted in further interference with collective bargaining in a number of ways:

• it prevented unions from trading off salary demands against non-monetary benefits;
• it prevented the collective bargaining process from addressing staff shortages;
• it interfered with the usefulness of the right to strike;
• it interfered with the independence of interest arbitration; and
• it interfered with the power balance between employers and employees.

The Court further found that Bill 124’s infringement on the right of freedom of association was not a reasonable limit on Charter rights. As a result, the Court declared Bill 124 to be void and of no effect. The Court deferred the determination of any specific remedy to a later hearing.

Since the release of the decision, the Ontario Government has indicated that it intends to file an appeal. What is clear is that the fallout from this decision is just beginning.  It is anticipated that many unionized employers in the broader public sector may face demands for increased compensation or requests from unions to reopen their collective agreements.  It is also uncertain whether any demands for increased compensation will be funded by the Ontario Government.  We will continue to monitor this situation and provide updates as they become available

If you have any questions about this decision or any other questions relating to workplace law, please do not hesitate to contact a Mathews Dinsdale lawyer.