The Ford government has lost an appeal over its controversial wage restraint legislation Bill 124 in a ruling released by Ontario’s top court on Monday.
The law — which capped public sector wages at one per cent per year for three years — was introduced by the Progressive Conservative government in 2019 in a bid to limit public sector spending.
The law impacted over 2,500 public sector collective bargaining units in Ontario and triggered a court challenge by a collection of unions and labour groups. In late 2022, the law was struck down as unconstitutional.
On Monday, the Ontario Court of Appeal agreed with the lower court ruling and upheld the decision that ultimately scrapped the legislation. The Ford government has said it will not take that ruling to the Supreme Court of Canada and will repeal the law instead.
In a split decision, a three-judge panel agreed with the original court ruling that said Bill 124 “substantially” interferences with collective bargaining rights.
In particular, the court ruling found the wage restraint legislation was unconstitutional because it failed to consult properly before it was enacted and there were no “meaningful” mechanisms for keeping any collective agreements out of the act.
“The circumstances of this case are distinguishable from other cases where wage restraint legislation was deemed constitutional because, here, there was no meaningful bargaining or consultation before the Act was passed,” Monday’s ruling found.
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“The Act significantly restricts the scope and areas left open for negotiation in the collective bargaining process.”
In its ruling, Ontario’s Court of Appeal indicated a lack of “significant” bargaining with unions before Bill 124 was introduced was one of the key reasons why the law violated charter rights.
The ruling also noted that the Ford government introduced the law “in anticipation of the beginning of collective bargaining in the education sector” meaning unions were unable to make any requests before being slapped with the controversial law.
“In many cases, if not most cases, no collective bargaining would have started before the Act was enacted,” Justice Lise Favreau wrote for the majority in the decision.
The decision pointed out that the director of public sector bargaining in the Treasury Board also “conceded” that bargaining with education unions was a “key consideration” for the timing of the legislation.
“This timing makes clear that it was not introduced after a period of meaningful bargaining and negotiation, which could have attenuated the impact of the Act on the respondents’ collective bargaining rights,” Favreau wrote.
“Removing wages and compensation as an item from negotiation is not an impediment to good faith negotiation and consultation per se if there is room left for meaningful bargaining on other matters,” part of the ruling read.
On Monday, unions welcomed the news the province’s top court agreed the law was unconstitutional.
“This decision confirms what so many already knew: that Bill 124 violated workers constitutionally protected rights, and that it should never have been made law,” Canadian Union of Public Employees (CUPE) president Fred Hahn said.
“Surely Doug Ford and his Conservatives will now finally get the message: stop wasting public tax dollars in the courts and start making substantial investments in public services and the people who deliver them.”
Michael Hurley, president of CUPE’s council of hospital unions, said he was “pleased” with the ruling.
“This is a win for all hardworking families who are trying to get ahead and all unions who fought on their behalf to protect the rights of all workers to freely bargain a collective agreement,” he said.
The Elementary Teachers’ Federation of Ontario called Bill 124 “an unconstitutional attack on workers’ rights.”
Several unions have seen backpay and compensation handed out for the years their wages were held at one per cent by the legislation.
Those payments were handed out because, although the Ford government immediately indicated in 2022 that it planned to appeal the ruling after it was thrown, the law was effectively voided for more than a year.
During that time, civil servants, nurses, hospital workers and college faculty staff were among the groups given compensation for the years they were capped by Bill 124.
CUPE president Hahn said he wanted to see compensation given to all workers governed by Bill 124, not those who had reopener clauses in the contracts they negotiated with the province.
The Ford government said on Monday evening it would not appeal the decision any further to the Supreme Court of Ontario. Instead, it plans to “take steps to repeal Bill 124 in its entirety in the coming weeks.”
The government also said it would “urgently” introduce regulations to exempt non-unionized and non-associated workers from the wage cap law until it is repealed.
Sources told Global News Ontario Premier Doug Ford convened an urgent caucus meeting late on Monday afternoon to inform MPPs he planned to walk back the controversial law now it has been thrown out.