FTR Now
Ontario Court of Appeal Upholds in Part Lower Court Finding That Bill 124 Is Unconstitutional; Bill to Be Repealed
Date: February 13, 2024
On February 12, 2024, the Ontario Court of Appeal rendered its much-anticipated decision in Ontario English Catholic Teachers Association v. Ontario (Attorney General). A majority of the Court upheld in part the decision of the Ontario Superior Court of Justice (ONSC) which found that Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (the Act or Bill 124), violated section 2(d) freedom of association rights under the Canadian Charter of Rights and Freedoms (Charter).
The majority of the Court of Appeal agreed with the ONSC that the Act was unconstitutional to the extent that it applied to represented employees, but also found that the rights protected by section 2(d) of the Charter do not apply in the same way to non-represented employees. Thus, the majority concluded that the ONSC erred in striking the whole statute.
Later in the day on February 12, 2024, the Ontario government announced that it would not be appealing the decision of the Court of Appeal, but would instead take steps to repeal the Act.
In this FTR Now, we discuss the Court of Appeal’s decision and next steps in light of the government’s announcement.
Background
Bill 124 was proclaimed into force by the Ontario government on November 8, 2019. It provided for a three-year window of salary moderation and compensation restraint measures for non-represented and represented employees employed by the Ontario government, Crown agencies, the broader public sector and a range of organizations that receive funding from the Ontario government.
Ten applications were brought to the ONSC by a broad range of unions and labour organizations challenging the constitutionality of Bill 124.
The decision of the ONSC was issued on November 29, 2022. The application judge found that Bill 124 substantially interfered with collective bargaining in violation of section 2(d) of the Charter and that the breach could not be saved under section 1 of the Charter. As a result of this finding, the application judge concluded that the Act was unconstitutional and struck the entirety of the statute declaring it “void and of no effect.” At the request of the parties, the ONSC deferred the consideration of any remedy to be awarded as a result of the Act having been in effect since June 2019 to a future hearing.
The Court of Appeal’s Decision
The Ontario government appealed the decision of the ONSC to the Court of Appeal. The government raised a number of issues on appeal including that the application judge erred in his interpretation of section 2(d), failed to follow existing case law dealing with the constitutional validity of wage restraint legislation and erred in his section 1 Charter analysis. The government also argued that even if the Act was invalid as it related to represented employees in the broader public sector, the application judge erred in declaring the Act void and of no effect for the non-represented employees who were also subject to the wage restraint provisions.
The majority of the Court of Appeal agreed that the Act substantially interfered with the collective bargaining rights of the respondent unions and labour organizations. The majority also agreed with the application judge that the Act was not saved by section 1 of the Charter. To establish a justification under section 1, the government had to show a pressing and substantial objective underlying the Act, a rational connection between the Act and this objective, minimal impairment of the Charter right and that the benefit of the Act outweighs any detriment to the respondents.
Although it ultimately reached the same finding on the section 1 analysis, the Court of Appeal rejected the application judge’s conclusion that the province did not establish that the objective of Bill 124 was “pressing and substantial.” In outlining this conclusion, the majority stated:
[181] In my view, the application judge erred in his approach to the analysis of whether Ontario had posited a pressing and substantial objective because he failed to give sufficient deference to the legislature’s policy objectives.
[182] While I appreciate that the Supreme Court has warned that courts should treat fiscal rationales as constitutionally suspect, these are ultimately matters of degree. Fiscal prudence on its own may be constitutionally suspect. However, where fiscal prudence arises from the government’s determination that it faces a real potential for fiscal crisis, the court should not engage in an overly technical analysis of the economic evidence and should refrain from analyzing subsequent savings or spending policies to assess the credibility of the government’s stated objective. Governments are entitled to set policy objectives and one of their core areas of policy-making is fiscal and budgetary.
The majority of the Court of Appeal also agreed with the application judge that Bill 124 was not minimally impairing and that the circumstances surrounding the government’s decision to enact the legislation did not justify its infringement of the Charter.
The dissenting justice at the Court of Appeal would have found that Bill 124 did not violate the respondents’ associational rights under section 2(d) of the Charter, and in any event, would have been saved under section 1.
With respect to the government’s arguments regarding non-represented employees, the majority of the Court of Appeal acknowledged that Bill 124 applies to both represented and non-represented employees, that “the rights protected by s. 2(d) of the Charter do not apply in the same way to non-represented employees” and “the Act is only unconstitutional in so far as it applies to the represented employees covered by the Act.” Thus, the majority found that the application judge had erred in striking the whole Act, which on this point the dissenting justice agreed.
What Does This Mean for Impacted Employers?
The immediate impact of the Court of Appeal’s decision differs for employees represented by a trade union or other bargaining organization and employees who are non-represented. For represented employees, Bill 124 remains void and of no effect and thus the situation is unchanged.
For non-represented employees, the decision of the Court of Appeal means that the Act again applies to these employees and has technically applied to them without interruption. That is, for these employees, it is as if Bill 124 had never been declared unconstitutional.
These divergent impacts bring us back to the Ministry of the Attorney General’s news release issued late in the day on February 12, 2024. In that news release, the government announced that it would not be appealing the Court of Appeal’s decision and that it would instead be taking steps to repeal Bill 124 in its entirety in the coming weeks. The news release also advised that Ontario would “urgently introduce regulations to exempt non-unionized and non-associated workers from Bill 124 until it is repealed.” No further details regarding the plan for a repeal or the specifics of regulations have been provided at this time.
The specific steps that the government takes to repeal Bill 124 will be important to assess, as they will determine whether there will be any lingering impacts on unrepresented employees and their employers from the Court of Appeal’s decision. We will continue to monitor the situation closely and will provide updates as they become available.
If you have any questions about the Court of Appeal’s decision or the government’s announcement, please reach out to your regular Hicks Morley lawyer.
Editor’s Note: On February 23, 2024, the Ontario Government repealed Bill 124 in its entirety through an Order in Council.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©
