Union and employer counsel clash over new limits in Bill C-39’s s. 107 rewrite and whether it survives Charter scrutiny
For labour lawyers, the fight over the Building Canada Strong Act focuses on the rewrite of s. 107 of the Canada Labour Code, the ministerial power Ottawa has repeatedly used to end strikes and lockouts in federally regulated industries.
Bill C-39, a 243-page omnibus bill tabled in the House of Commons on Sept. 21 by Transport Minister and Government House Leader Steven MacKinnon, keeps that power but puts conditions on it.
The existing s. 107 gives the Minister of Labour broad authority to do whatever the minister considers necessary to keep or restore labour peace. Governments have relied on it in recent years to refer rail, port, airline, and postal disputes to the Canada Industrial Relations Board (CIRB) for back-to-work and binding arbitration orders. Several of those orders have been challenged in court.
To use s. 107, the minister must first appoint a special mediator, no later than day 75 of the statutory conciliation period. The bill also lengthens that period from 60 to 90 days. And the minister can act only after a work stoppage begins.
The mediator has up to 21 days to resolve the dispute. If talks fail, the mediator must report on the open issues, each side’s position and participation, and whether a settlement is likely. The report becomes public five days later.
Employment and Social Development Canada also assesses the national impact of a stoppage.
After receiving the reports, the minister may conclude that a strike or lockout would have what the government calls a “significant adverse national impact.” If so, the minister can direct the CIRB to order a return to work, extend the existing collective agreement or impose binding arbitration.
Unions say the national-impact test is broad enough to rule out legal strikes in federal industries. Employers say the conditions narrow the government’s room to act.
Otherwise, senior union-side and employer-side counsel interviewed by Canadian Lawyer agree that much of the bill is meritorious. They disagree, however, on both the policy and the legality of s. 107.
Paul Cavalluzzo, founding partner of Toronto’s Cavalluzzo LLP, says the right to strike is a constitutional guarantee that must be meaningful in practice as well as on paper.
He identifies two problems with the bill. The first concerns collective bargaining itself.
“A strike gives a union real bargaining power because the employer knows a stoppage will cause economic damage,” he says. “If an employer knows it can end a strike simply by getting the minister to intervene, collective bargaining is upended, and the union’s rights are diminished.”
The second problem is political.
“When a constitutional right such as freedom of association is at stake, Parliament should be the body that takes it away,” he says. “But Bill C-39 lets the minister make that decision behind closed doors, without transparency or debate.”
Cavalluzzo acknowledges that the bill has positive features, including its certification provisions for particular industries and its added conciliation and mediation.
“The key problem is the right to strike,” he says.
Union leaders have been blunter. Canadian Labour Congress president Bea Bruske told the Toronto Star that workers may keep the right to strike but never be able to exercise it. She also said the revised power is more likely to be used pre-emptively.
International Longshore and Warehouse Union Canada president Tom Doran told the Toronto Star that every port dispute affects the economy, meaning the national-impact test effectively eliminates the right to strike in his sector.
Christopher Pigott, in Fasken Martineau DuMoulin LLP’s Toronto office, notes that part of the new process aids both sides.
“The special mediator and public report requirements put pressure on both parties to settle.”
But employers see Bill C-39 as narrowing, not expanding, the government’s options regarding strikes and lockouts.
“As s. 107 now stands, the government can act pre-emptively,” Pigott says. “Under Bill C-39, a strike or lockout must actually begin before the government can intervene. Employers are asking why they should have to wait for a work stoppage to start and for the damage to be done before the government can provide relief.”
Pigott’s reading conflicts with the unions’ claim that the bill invites pre-emptive intervention. The government’s own description of the bill supports Pigott’s account: CIRB directions become available only once a stoppage has started.
Pigott says unions and employers fundamentally disagree about whether s. 107 is constitutional, and he points to two recent Ontario Court of Appeal rulings that he maintains support its validity.
Those decisions, released Feb. 6, are the court’s first consideration of the constitutionality of back-to-work legislation.
In Ontario Public Service Employees Union v. Ontario (Attorney General), the court held that Ontario’s 2017 legislation ending a college strike limited the faculty’s freedom of association, but that the limit was justified under s. 1 of the Charter because the law sent every outstanding issue to neutral, unrestricted interest arbitration and dictated no terms.
In Canadian Union of Postal Workers v. Canada (Attorney General), where Cavalluzzo represented the union, and Pigott acted for Canada Post, the court dismissed the union’s challenge to a 2018 law ordering Canada Post workers back to work because the case was moot. In the alternative, applying its reasoning in the college faculty case, the court found that the law limited the workers’ freedom of association but was justified under s. 1.
The decisions emphasized neutral interest arbitration as an “appropriate substitute” and “meaningful alternative mechanism” for strike action.
“Given that case law, a back-to-work order made under the amended s. 107 paired with neutral arbitration would not be unconstitutional,” Pigott says.
But both rulings concerned statutes passed by a legislature, not ministerial orders. And that distinction goes to the heart of Cavalluzzo’s objection that the decision to suspend a Charter right belongs to Parliament.
Beyond s. 107, the bill makes several other changes to federal collective bargaining.
If passed, the new law would make first-contract arbitration available as of right after nine months of bargaining.
“This provision reflects the reality that first contracts can be especially hard to conclude and sometimes need interest arbitration,” Pigott says.
But a client bulletin from Mathews, Dinsdale & Clark LLP, a national employer-side labour and employment law boutique, observes that making first-contract arbitration a right could reward a party that has not made reasonable efforts at the bargaining table.
For renewals, bargaining must begin 180 to 200 days before the existing agreement expires in certain cases, including where the previous round involved a strike or lockout. The bill also expands the routes to regional, multi-employer bargaining units, allowing employers, the minister or the CIRB itself to start the process.
The bill now faces debate and committee study in the House of Commons.
For Cavalluzzo, though, the bill stands or falls on s. 107. The prime minister, he says, should rethink it.
