Budget 2023 proposed amendments to the Canada Labour Code that would prohibit the use of temporary replacement workers during a strike or lockout. On November 9, 2023, the Federal Government introduced Bill C-58 to give effect to these changes.

Background

Part I of the Canada Labour Code (“Code”) sets out the rules for unionization, collective bargaining, and strikes and lockouts in the federal sector. The Code applies to about 22,000 employers and 985,000 employees working in key industries, including interprovincial and international transportation, telecommunications, banking, and the postal service.

Under the Code, employers have been permitted to temporarily replace bargaining unit employees during a strike or lockout in order to continue operations.   This is consistent with the labour laws in most of the provinces.    In fact, only Quebec and British Columbia currently restrict the use of temporary replacement workers.  

Notably, the last comprehensive review of the Code, which took place in 1995, recommended that federal employers should continue to be permitted to use temporary replacement workers (Seeking a Balance,  Canada Labour Code Part 1 Review (1995)).

Bill C-58:  Prohibition on Temporary Replacement Workers

The current minority Liberal Government, as part of its “Supply and Confidence” agreement with the New Democratic Party (“NDP”), gave an undertaking to the NDP that it would introduce a legislative ban on temporary replacement workers.   

On November 9, 2023, the Liberal Government introduced Bill C-58 to satisfy its undertaking to the NDP. 

Bill C-58 addresses two issues:  (1) temporary replacement workers and (2) maintenance of essential activities.  

(1) Temporary replacement workers

Bill C-58 amends section 94 of the Code by introducing a number of prohibitions on the use of temporary replacements workers during a strike or lockout.   The specific prohibitions include the following:

(a) No employer will be permitted to have bargaining unit work performed by any employee, manager or confidential employee who was hired after the day on which notice to bargain was given (section 94(4)(a)). This suggests that having bargaining unit work performed by employees excluded from the bargaining unit (e. managers, confidential employees, etc.) will continue to be permitted so long as those excluded employees were hired before notice to bargain was given.

(b) Contractors and employees of another employer will also be prohibited from performing bargaining unit work during a strike or lockout (section 94(4)(b)). However, Bill C-58 includes two exceptions to this prohibition. First, if the employer was using the services of a contractor or another employer’s employee before notice to bargain was given, then those contractors/employees will be able to continue performing those services during the strike or lockout “so long as they do so in the same manner, to the same extent and in the same circumstances as they did before the notice was given” (section 94(5)). Second, the prohibition on the use of contractors excludes “dependent contractors” (section 94(4)(b)).   The purpose of this exclusion is unclear and clarification may be needed.

(c) Bargaining unit employees will not be allowed to work during any strike or lockout that involves “the cessation of work by all employees in the bargaining unit”, except if they are required to do so for purposes of maintenance of activities or if it is necessary due to a serious threat to the employer’s business or the life, health or safety of any person (section 94(6)). This effectively means that bargaining unit employees will be prohibited from making the decision to cross the picket line and return to their jobs during a full blown strike or lockout.

Any employer who contravenes the prohibition on temporary replacement workers will be found guilty of an offence and could face a fine of up to $100,000 for each day during which the offence is committed or continued (section 100.1).

(2) Maintenance of Activities

Bill C-58 also includes a number of amendments to the maintenance of activities provisions in section 87.4 of the Code. 

The current Code provisions on maintenance of activities require an employer and a union to identify work performed by the bargaining unit that is “necessary to prevent an immediate and serious danger to the safety or health of the public” and to enter into an agreement to ensure that such work continues to be performed during a work stoppage (section 87.4(1)).

The stated purpose of the proposed amendments is to encourage employers and unions to reach earlier agreements on maintenance of activities and to enhance the role of the Canada Industrial Relations Board (“CIRB”) in resolving disputes on the issue.

In particular, Bill C-58 will amend section 87.4(2) of the Code to require an employer and union to reach an agreement on maintenance of activities no later than 15 days after the notice to bargain has been given.  If the parties fail to reach such an agreement within 15 days, either party may apply to the CIRB to have outstanding issues resolved and the CIRB is required to issue a decision within 90 days of receiving the application (sections 87.4(3) and (6.1)).

Preliminary Observations

Most Canadian jurisdictions have resisted the demand to prohibit the use of temporary replacement workers during a strike or lockout because any such prohibition undermines the balance in the labour relations system and denies employees the right to decide for themselves whether they wish to work during a strike or lockout.   Bill C-58 appears to be motivated by political expediency rather than sound policy considerations, and is therefore a concerning development.

Linking a ban on replacement workers with amendments in respect of maintenance of activities suggests that the Government is concerned about the political and policy risks of preventing employers from continuing their operations during a strike or lockout, and is hopeful that expediting maintenance of services agreements will go some way to address these risks.

We will continue to provide updates on Bill C-58 as it progresses through Parliament.

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