Experience Notable Cases Court finds Bill 124 violated constitutional rights

Court finds Bill 124 violated constitutional rights

November 30, 2022

Superior Court of Justice declares that Bill 124 violates the Charter

The Superior Court of Justice has held that Bill 124 – the so-called “Protecting a Sustainable Public Sector for Future Generations Act, 2019” – violates s. 2(d) of the Canadian Charter of Rights and Freedoms.The Court declared Bill 124 to be void and of no effect.

Background

The Ford Government introduced Bill 124 in June 2019. After limited debate and perfunctory committee hearings, the legislation was passed in early November 2019. It imposed a series of 3-year “moderation periods” in the form of salary and compensation caps on a variety of public sector unionized and non-unionized workplaces. During these periods, increases to both salary rates and to existing or new compensation requirements (including salary rates) were capped at 1% per year, subject to certain exceptions. Our summary of Bill 124 is here.

A number of unions challenged the legislation, arguing among other things that it violated section 2(d) of the Charter. Section 2(d) guarantees freedom of association, which includes the right to collective bargaining and the right to strike.

The Court’s decision

The Court agreed with the unions. It took a broad, purposive approach to section 2(d), holding that “the purpose of collective bargaining is to empower weaker members of society to meet the more powerful, including the state, on more equal terms.” When state action prevents or restricts subjects from being discussed as part of the collective bargaining process, it interferes with collective bargaining. The Court held that the 1% wage cap in Bill 124 violated section 2(d) by substantially interfering with collective bargaining in a number of ways, including by:

• imposing a financial impact:

“[O]ne of the underlying purposes of collective bargaining is to equalize power imbalances between employees on the one hand and employers or the state on the other hand, that purpose is fundamentally undermined when the state intervenes by imposing limits on wage increases. In that latter situation, collective bargaining does not equalize power. Rather, it exacerbates inequality by allowing the state to prevent employees from having a meaningful discussion about the issue. While the Charter may not protect outcomes, it should also not allow the state to predetermine outcomes.”

• preventing unions from trading off salary demands against non-monetary benefits:

“The reduction in negotiating power that the Act has brought about prevents employees from having their views heard in the context of a meaningful process of consultation that could lead to an improvement of working conditions.”

• preventing the collective bargaining process from addressing staff shortages:

Bill 124 has “prevented employers and unions from negotiating solutions to address this crisis even though the government’s own study linked the staffing crisis [in Long Term Care homes] to compensation”
…

“The often traumatic conditions under which employees in the healthcare sector work leads working conditions caused by staffing issues to be a significant priority. These are key collective bargaining issues. Given staff shortages, the collective bargaining power of employees would generally be increased in a way that would enable them to improve wages, ameliorate staff shortages and improve working conditions. The 1% salary cap has taken that power away from employees.”

• interfering with the usefulness of the right to strike:

“While employees may technically retain the right to strike, it has been rendered financially meaningless…”

• interfering with the independence of interest arbitration:

“It is difficult to see how arbitration can be impartial or effective if the government imposes limitations on wages that are lower than what the arbitrators say they would have awarded had the Act not constrained them. In this context the arbitral awards do not reflect the fruits of impartial decision-making but that of state fiat.”

• and interfering with the power balance between employer and employees:

“The government was using its legislative power to avoid real collective bargaining and to tilt the balance of power in favour of the government… it is difficult to see how there can be an effective collective bargaining system when the employer has been given the trump card of compensation increases lower than the rate of inflation and lower than freely bargained agreements.”

The Court went on to hold that the breach of section 2(d) of the Charter could not be saved under section 1 of the Charter. In particular, the Court held that although the government was relying on overinflated budget deficits to introduce Bill 124, it was simultaneously introducing billions of dollars in tax cuts, undermining its fiscal justification for violating the Charter:

“Ontario has not, however, explained why it was necessary to infringe on constitutional rights to impose wage constraint at the same time as it was providing tax cuts or license plate sticker refunds that were more than 10 times larger than the savings obtained from wage restraint measures.”

With respect to remedy, the Court declared the Act to be unconstitutional and deferred any specific remedy to a later hearing.

Read the decision here.

Lawyers from GP represented ETFO, AEFO and the OFL in the constitutional challenge.