1% Wage Cap Bill Ruled Unconstitutional in Victory for Labour Movement

On Tuesday, November 29th, the Superior Court of Ontario struck down Bill 124, declaring it unconstitutional. This is a significant victory for the labour movement and the right to collective bargaining, and could have effects on the CUPE 3903 collective agreements. 

What is Bill 124?

Bill 124, the euphemistically named Protecting a Sustainable Public Sector for Future Generations Act, is a provincial legislation passed in June 2019. The purpose of the legislation was to cap compensation increases for all public sector workers at 1% per year for a moderation period of three years. The compensation caps not only includes wages but anything that can be counted as part of compensation, including benefits, funds, paid time off, etc.  More than just limiting compensation, this bill was introduced by the Ford government as a bad faith attempt to curtail our Charter rights to bargain collectively and to strike, instead of negotiating with unions.

For CUPE 3903, the collective agreements for 2020-2023 for Units 1, 2, and 3 and for 2021-2024 for Unit 4 were subject to the legislation. Those rounds of bargaining were characterised by the employer trying to claim as many things as possible as compensation in order to reduce the gains possible in collective bargaining. Our experience is very much replicated across the public sector, as workers of all kinds struggled to make meaningful gains – or even break even – in a bargaining context where the maximum increase was well below inflation.    

The Superior Court Ruling

Several unions challenged the constitutionality of this law, stating that it violated the rights under the Canadian Charter of Rights and Freedoms. The Supreme Court of Canada has held several times that the right to collective bargaining, including the right to strike, is a protected form of freedom of association. The unions contesting the Bill argued that such substantial interference with bargaining amounts to a violation of that right. 

The Ontario Superior Court of Justice agreed and declared the legislation “to be void and of no effect”.

The essence of the ruling is that 

  1. a) wage cap legislation such as Bill 124 does substantially interfere with the protected right to collective bargaining, 
  2. b) while such interference could be justified for a good enough reason, the government of Ontario failed to demonstrate a financial crisis that would justify this move, also mentioning that billions of dollars in tax cuts were put into effect at the same time, 
  3. c) some of the workplaces impacted by the bill are not rationally connected with the objectives of the bill, i.e. reducing government spending, since the government does not directly pay wages. The energy and university sectors specifically are mentioned as sectors where government spending is not tied to wages, and 
  4. d) the government did not show that there were not other measures they could take to reduce government spending that would not require violating a protected Charter right. 

Overall, it is an excellent decision which astutely draws out the implications of Bill 124 on the right to collective bargaining and the right to strike. The Ford government – which all but admitted the bill was designed to do an end-run around those rights – has announced they intend to appeal. 

What This Means for CUPE 3903

All four collective agreements included a wage reopener clause that would allow us to renegotiate wages in the event of a successful challenge to the legislation. However, given the government’s stated intention to appeal, it is unclear if and when we will be able to take advantage of this clause. The text of the clause reads:

The Parties hereby understand and agree that in the event that the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (“Bill 124”) is repealed, or successfully challenged through the courts such that it is of no force and effect and is not the subject of any ongoing appeal, during the term of the renewal collective agreement (i.e. at any point prior to August 31, 2023 [2024 for Unit 4]), the parties agree to re-negotiate the portions of those salary and compensation provisions of this collective agreement that were limited by Bill 124, but only to the extent permitted by law and having regard to the Employer’s financial position.

This Letter of Understanding will expire on August 31, 2023 [2024 for Unit 4].

If the appeal is dropped or denied before the wage reopener clause expires, the union will pursue this option to its fullest. In the event that the CAs expire before a resolution is reached, we intend to take the position that compensation in the next round of bargaining ought to take into account that the employer benefitted from a violation of our basic constitutional rights to keep our wage increases to a level that was well below inflation even before the current cost of living crisis began. 

Even though what happens next is still to be determined, this decision is a win for the right to collective bargaining. Combined with the way unions worked together towards a general strike to force the government to repeal legislation making the education workers’ strike illegal, there is a message here for the labour movement: no matter what happens, let’s not back down. Collective bargaining and the right to strike are rights that we must protect at any cost.

To read the official decision from the Ontario Court of Justice, see the link below:

Ontario English Catholic Teachers Association et al. v. His Majesty the King in Right of Ontario 2022