The Canadian Government Has Proposed New “Anti-Scab” Legislation Which Would Greatly Restrict the Use of Replacement Workers During Strikes and Lockouts in Federal Workplaces
On November 9, 2023, the government of Canada proposed new “anti-scab” legislation which would amend the Canada Labour Code (the “Code”) to greatly restrict the use of replacement workers during strikes and lockouts in federally regulated workplaces.
Most notably, Bill C-58, would amend the Code to: (i) substantially expand the scope of the existing prohibition against the use of replacement workers during legal strikes and lockouts, subject to certain exceptions; (ii) prohibit employers from using the services of bargaining unit members during a legal strike or lockout, subject to certain exceptions; and (iii) create harsh potential penalties for employers that violate either of these prohibitions. Bill C-58 would also enact related changes, such as allowing the Governor in Counsel to make regulations to establish administrative monetary penalties for violations of the new prohibitions, and changes impacting the maintenance of activities process requiring parties to reach earlier agreements regarding the essential services to be maintained during labour disputes.
Background
The Code currently only prohibits employers from using the services of non-bargaining unit members (i.e., “replacement workers” or “scabs”) to perform bargaining unit work during a legal strike or lockout where it is “for the demonstrated purpose of undermining a trade union’s representational capacity rather than the pursuit of legitimate bargaining objectives”. This prohibition was introduced in 1999, and there was previously no express prohibition against the use of replacement workers by federally regulated employers during legal work stoppages.
While there is very limited arbitral jurisprudence interpreting this existing prohibition, it is notable that the Canada Industrial Relations Board (“CIRB”) has never found an employer to have violated it in any reported decision. This has led some labour advocates and policymakers to call for greater restrictions on employers’ ability to use replacement workers.
The Proposed New Anti-Scab Prohibitions & Exceptions
First, Bill C-58 would expand the prohibition against the use of replacement workers by prohibiting employers from using the services of the following persons “to perform all or part of the duties of an employee who is in the bargaining unit on strike or locked out”:
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Any of the employer’s workers who perform management functions or who are employed in a confidential capacity in relation to industrial relations matters, and who were hired after the day on which notice to bargaining collectively was given;
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Any contractor, other than a dependent contactor or employee of another employer.
Second, Bill C-58 would prohibit employers from using the services of any employee in the bargaining unit to perform bargaining unit work during a legal strike or lockout, for any purpose other than complying with the Code’s maintenance of activities requirements. That is, where doing so is necessary to prevent immediate/serious damage to the health or safety of the public.
One exception to the prohibition on using replacement workers is that an employer may continue to use the services of any contractor to do all or part of the duties of a bargaining unit member where: (i) the contractor was providing substantially similar services to the employer prior to the day on which notice to bargain was given; and (ii) they continuing providing those services “in the same manner, to the same extent and in the same circumstances as they did before the notice was given”.
Bill C-58 would also introduce a further exception that would allow employers to use the services of replacement workers and bargaining unit members during a legal strike or lockout where it is solely to deal with a situation that presents (or could present) an imminent or serious threat of/to any of the following, and where the employer could not deal with the situation without using the services of such individuals:
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the life, health or safety of any person;
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destruction of, or serious damage to, the employer’s property or premises; or
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serious environmental damages affecting the employer’s property or premises.
Penalties for Breaching the Prohibitions
If Bill C-58 is passed, employers who breach the new prohibitions would be guilty of an offence and liable on summary conviction to a fine of up to $100,000 for each day the offence is committed or continued. Additionally, Bill C-58 would also empower the Governor in Counsel to make regulations to establish administrative monetary penalties (“AMPs”) for violations of the new prohibitions. Given that such regulations have yet to be passed, it is currently unclear how large the applicable AMP(s) would be.
Changes Impacting the Maintenance of Activities Process
Bill C-58 would also introduce changes impacting the maintenance activities process designed to get employers and unions to reach earlier agreements regarding the activities that are to be maintained in the event of a legal strike or lockout.
In particular, Bill C-58 would require employers and unions to enter into an agreement regarding the maintenance of activities no later than 15 days after notice to bargain has been given, which is currently permitted but not required under s.87.4(2) of the Code. Similarly, employers and trade unions would generally be required to reach an agreement regarding maintenance of activities and file it with the Minister of Labour before being permitted to give the legally required notice for a strike or lockout under s. 87.2 of the Code, as applicable.
The Bottom Line
If passed, Bill C-58 would be highly detrimental to Canadian employers that are federally regulated and have unionized workforces because it would greatly diminish their ability to mitigate the adverse operational impacts of legal strikes, while also making legal lockouts a more impractical tool for employers to gain leverage in collective bargaining disputes. That said, there are a number of exceptions which employers could leverage in order to mitigate the adverse operational impacts of legal strikes and to make lockouts more feasible.
Bill C-58 passed second reading on Tuesday, February 27, 2024, in the House of Commons and with unanimous consent. Yes, and surprisingly, that includes the Conservatives. It is unclear when the bill will ultimately be passed, but hopefully in the meantime, it can be fine-tuned to lessen its detrimental impact upon unionized employers.
Fortunately, Bill C-58 would not come into force until 18 months after receiving royal assent, giving employers more time to consider how they would navigate the new prohibitions during a legal work stoppage.
And finally, provincially regulated employers; do not rejoice yet. The Ontario NDP introduced Bill 90, a private member’s anti-scab bill in March 2023 (second reading, November 2023) with a view to similar effect. It has not gained traction (lost on division), however with Federal Conservatives supporting a ban against replacement workers, one can be very concerned that it might ultimately be an attractive proposition for the Ford government in Ontario. Let us hope that is not the case, but it might be only a matter of time.
If you have any questions regarding the amendments discussed above, of if you require any assistance with navigating a collective bargaining dispute/work stoppage, please do not hesitate to contact us for expert legal advice and guidance.
