The Ontario Court of Appeal upheld the bulk of a previous ruling that found the Ford government’s legislation capping public sector wage increases was unconstitutional.
The court made its ruling Monday in a 2-1 decision, with Justice Lise Favreau writing in the decision that she “cannot accept that the circumstances surrounding the government’s decision to enact the legislation justify its infringement of the Charter.”
“Taking into consideration the context in which Bill 124 was introduced and the restraints imposed by the Act, I am satisfied that the Act substantially interferes with the respondents’ right to participate in good faith negotiation and consultation over their working conditions,” wrote Favreau.
However, she added that the earlier decision made by Justice Markus Koehnen of Ontario’s Superior Court was “overly broad,” and that striking Bill 124 down “should be limited to a declaration that the Act is unconstitutional in so far as it applies to (union) represented employees.”
Non-unionized workers are a minority of the 400,000 employees of the government and broader public sector organizations affected by the law.
The Ford government has not yet announced if it will seek to appeal Monday's decision at the Supreme Court of Canada, the country’s highest court.
A few hours after the decision was published, Finance Minister Peter Bethlenfalvy spoke to reporters at Queen’s Park to coincide with the release of the government’s 2023-24 third quarter finances and said he “hadn’t been briefed yet on the (Appeal Court’s) decision” and thus wouldn’t “speculate on what (the government) may or may not do” in response to it.
Bill 124 was tabled by Bethlenfalvy in June 2019, when he was Treasury Board president.
Premier Doug Ford and the Progressive Conservatives said the legislation would help the government work towards managing the province’s debt. Bill 124 was passed in November 2019.
Labour groups, meanwhile, were irate about the law that limited wage increases for many public sector workers to one per cent a year for a maximum of three years and decided to take the province to court.
In November 2022, Koehnen’s Ontario Superior Court ruling deemed the law unconstitutional. The government then appealed, leading to the decision that was published on Monday, which labour unions celebrated.
CUPE’s Ontario Council of Hospital Unions, SEIU Healthcare and Unifor issued a statement calling the ruling 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.”
They called on the Ford government to “end all wage restraint schemes and let Bill 124 go.”
The legislation affected teachers, hospital staff, staff of provincial ministries and others.
Some groups have been awarded retroactive pay increases above the annual one per cent cap through recent collective bargaining and arbitration triggered by Koehnen’s earlier Superior Court ruling. For instance, last Friday an arbitrator decided teachers and education workers with two unions would get a retroactive wage increase of 2.75 per cent for the third year of their previous contracts. Additional wage bumps for the first two years under Bill 124 were agreed to by the workers and the province’s representatives.
The Financial Accountability Office of Ontario (FAO) estimated in a Sept. 28, 2022 report that the province could be required to spend $8.4 billion over five years in salary and wage increases, including retroactive payments, if Bill 124 was ultimately overturned.
Bethlenfalvy said on Monday that the government has “incorporated” spending into its budget to account for “Bill 124 re-openers” and “catch-ups,” including in the Ministry of Finance document released on the same day. Its 2023-24 third quarter finances showed the government is adding $1.7 billion more spending “in health sector supports,” including “to address pressures related to compensation costs.”
However, not all workers’ groups covered by Bill 124 were able to negotiate “re-opener language” in their contracts affected by the legislation, according to CUPE Ontario president Fred Hahn. “We represent 40,000 social service workers, (and) the vast majority of them did not have automatic re-opener language,” Hahn said at Queen’s Park on Monday.
The FAO also estimated in its Sept. 28, 2022 report that Bill 124 would have saved the provincial government $9.7 billion in employee salary and wage costs, as the office assumed non-unionized employees would not be compensated if the legislation was struck down.
The Appeal Court decision determined that while Bill 124 violated constitutional rights that apply to unions that the same rights “do not apply in the same way to non-represented employees.”
“Accordingly the Act (Bill 124) is only unconstitutional in so far as it applies to the represented employees covered by the Act,” Favreau wrote in her decision.
C. William Hourigan was the Appeal Court judge who disagreed with the decision penned by Favreau, which Justice David H. Doherty was onside with. Hourigan wrote in a dissenting opinion that he didn’t believe Bill 124 contravened constitutional rights applying to unions, and that even if it did then it did so to “a reasonable limit prescribed by law.”
Opposition parties applauded both the court’s decision and workers’ efforts to fight Bill 124 after the ruling was released on Monday.
Flanked by labour leaders at a news conference at Queen’s Park, NDP Leader Marit Stiles said the Ford government should take it as a “clear message” to “respect the court’s decision, drop this appeal, back off workers, pay them fairly, respect them and start actually addressing the crises in health care and other public services that Ontarians are facing today.”
Liberal Leader Bonnie Crombie said it’s “a huge, long-overdue victory for the workers,” while the Greens called on the government to “leave this sorry episode to the dustbin of history.”
Labour leaders who accompanied Stiles spoke about the impact of the legislation in various sectors. Erin Ariss, president of the Ontario Nurses' Association, said she saw “nurses leaving in droves” during the pandemic.
JP Hornick, president of the Ontario Public Service Employees Union, vowed to continue fighting Bill 124 if the government decides to appeal again.
“If they continue down this road … we'll take it all the way to the Supreme Court, but on the way we will make their lives hell, right, because that is what they have done to front-line workers in every single sector of this province,” Hornick said.
Meanwhile, Laura Walton, president of the Ontario Federation of Labour, scoffed at the idea of the government appealing Monday’s decision.
“The first thing I would say is that why are we appealing something you've already lost twice? And in situations where you have already indicated … that you recognize that the bill was wrong, and you've already put in place ways to account for remedy,” Walton said.
Michael Hurley, president of CUPE’s Ontario Council of Hospital Unions (OCHU-CUPE), told The Trillium he’s hopeful the government will accept the ruling, rather than take it to the Supreme Court.
“While we're confident that the Supreme Court would uphold these decisions, there's always a risk they won't, and if they didn't, the consequences would be really chaotic and punitive,” said Hurley, adding that it could mean thousands of workers have to “give back” increases they’ve received above the one per cent.
If the government does decide to appeal, Russell Groves, a partner in the Employment & Labour group at Dentons, said he thinks it’s “unlikely” the Supreme Court would make a different finding.
Even though Bill 124 is Ontario-specific, taking the case to the Supreme Court would make it national and could have implications for other provinces, he said.
“There is some higher stakes there for the other provinces on their ability to do this sort of thing in the future,” Groves said.
As for Monday’s ruling, he said to the extent that non-unionized workers in the public sector might have lobbied for and received wage increases above the one per cent, “their direct employers are going to have a problem because they're going to have to go back and comply with Bill 124.”