Ontario Court Strikes Down Bill 124

Written on behalf of Peter McSherry

An ongoing dispute between unionized public sector employees and Ontario’s provincial government has been addressed by the Ontario Superior Court of Justice in the decision of Ontario English Catholic Teachers Association v. His Majesty declared Bill 124 unconstitutional. 

Bill 124, also known as the Protecting a Sustainable Public Sector for Future Generations Act, 2019, was deemed unconstitutional due to its limitations on the rights of unionized workers, particularly concerning 1% annual caps on pay increases. The Court found that the public sector wage limits violated the Canadian Charter of Rights and Freedoms.

Bill was introduced three years ago

Bill 124 was introduced by the Ontario government in the summer of 2019. It subsequently became law approximately four months later. The Bill limited annual pay increases to 1% for Ontario government employees, crown corporations and certain private corporations. The Bill impacted approximately 780,000 workers across the province. 

The Bill was contentious from the outset, with unions announcing early on that they intended to challenge the new law. In its decision, the Court stated that it received multiple applications, many of which challenged the Bill based on its violations against the Charter-protected rights of workers. Specifically, the applications addressed workers’ rights relating to freedom of association, freedom of speech, and equality. 

The government took the position that the Bill was not unconstitutional. Further, if it was found to be unconstitutional, the Bill would be saved by section 1 of the Charter allowing governments to limit rights if the limits are “reasonable” and “demonstrably justified.” 

The Court concluded that the Bill did, in fact, infringe on workers’ freedom of association but did not infringe on any other grounds.

How are wage limits tied to the Charter?

The issue of wage increase limits for unionized workers is dealt with in the collective bargaining process. Collective bargaining rights, such as freedom of association, are rights protected by the Charter. The right to freedom of association is not limited to physical gathering and guarantees “a meaningful collective bargaining process that allows workers to meet with employers on more equal terms, to put forward the proposals they wish and to have those proposals considered and discussed in good faith.” 

In the case at hand, the Bill prevented employees from engaging in collective bargaining for more than 1% wage increases. The Court determined that the prescribed limit prevented employees from seeking increased wages and limited their ability to negotiate non-monetary benefits. 

The Court held that the Bill nterfered with the right to strike, the independence of arbitration (which can be used to break impasses in contract negotiations) and impacted the power balance between employees and employers. 

Can the infringement be justified?

The Charter allows room for reasonable limits to be imposed on rights. However, such a limitation must satisfy the two-part test set out by the Supreme Court of Canada in R v. Oakes, which asks:

1. Is the legislative goal pressing and substantial? In other words, is the objective sufficiently important to justify limiting a Charter right?; and
2. Is there proportionality between the objective and the means used to achieve it?

In order to satisfy the test, there are three elements which must be established:

1. The limit must be rationally connected to the objective, with a causal link between the impugned measure and the pressing and substantial objective;
2. The limit must impair the right or freedom no more than is reasonably necessary to accomplish the objective; and 
3. There is proportionality between the deleterious and salutary effects of the law.

Court analyzes alleged infringement

The Court found that the first stage of the test was satisfied as the alleged infringement addressed a pressing and substantial goal because of the government’s budgetary challenges. With respect to the second limb of the test, the Court found a rational connection between the objective of the Bill and the limits on wage increases. However, the Court determined that the Bill went far beyond limiting the wage increases for certain workers, particularly with respect to university staff who are not necessarily publicly funded employees or institutions.

When assessing the proportionality, the Court found that the government did not satisfy the “minimal impairment” criteria because the government could have simply refused to offer wage increases of more than 1%, rather than preventing strikes. Therefore the minimal impairment requirement was not met. 

Bill goes beyond “minimal impairment” test

After concluding that the Bill did not satisfy the minimal impairment test, the Court went on to note that the government further did not achieve the final balancing needed to satisfy the third element of the test, as no explanation was provided as to how the government could otherwise limit wage increases.  

The government has announced plans to appeal the decision.

Peter A. McSherry advises unionized and non-unionized employees on labour and employment disputes 

Peter A. McSherry is an employment lawyer based in Guelph who regularly advises unionized workers on their options in various labour disputes. Our office helps provide employees with the tools and resources to consider their options and work towards the best possible resolution to ensure their rights remain protected. Contact our firm at 519-821-5465 or by e-mail to schedule an initial consultation.