On February 12, 2024, in Ontario English Catholic Teachers Association v. Ontario (Attorney General), 2024 ONCA 101, the majority of the Ontario Court of Appeal (OCA) upheld, in part, the decision of the Ontario Superior Court of Justice (ONSC) in Ontario English Catholic Teachers Assoc. v. His Majesty, 2022, ONSC 6658, in which the ONSC found that Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (Bill 124), violated section 2(d) freedom of association rights under the Canadian Charter of Rights and Freedoms (Charter), and declared it to be void and of no effect.

While the majority of the OCA agreed with the ONSC that Bill 124 was unconstitutional in its application to represented employees, it found the ONSC erred in striking the whole Act because the rights protected by s. 2(d) of the Charter did not apply in the same manner to non-represented employees.

In a press release issued on February 12, 2024, following the release of the OCA’s decision, the Government of Ontario (Government) stated that it “… will not appeal today’s Court of Appeal decision and will instead take steps to repeal Bill 124 in its entirety in the coming weeks.” On February 23, 2024, the Government did so. Accordingly, the OCA decision will not affect unrepresented employees and their employers.

Background

On June 5, 2019, Ontario introduced Bill 124, which limited wage increases for approximately 780,000 workers in the broader public sector to 1% per year for a three-year moderation period. When the ONSC’s decision was released, Bill 124 had already begun to apply to some bargaining units but not to others.

Labour organizations challenged the constitutionality of Bill 124 in 10 separate applications, all of them heard consecutively by the ONSC over 10 days in September 2022.  The applicants argued that Bill 124 limited the freedom of association, freedom of speech, and equality rights of their members under the Charter. Ontario denied this and, in the alternative, argued that if Bill 124 did infringe on any Charter rights, it was saved by s. 1 of the Charter as a reasonable limit that is demonstrably justified in a free and democratic society.

In its decision,  the ONSC found that Bill 124 (i) infringed on the applicants’ right to freedom of association under s 2(d) of the Charter; (ii) did not violate the applicants’ freedom of speech or equality rights under the Charter; and (iii) was not saved by s. 1 of the Charter.  After declaring Bill 124 to be void and of no effect, the court deferred consideration of any remedy to a further hearing, as requested by the parties.

We discussed the ONSC’s reasons in detail here.  

Government’s Arguments

On December 29, 2022, the Government filed a notice of appeal of the ONSC’s decision. 

In making its appeal to the OCA, the Government argued that the ONSC erred in:

• Treating s. 2(d) as a substantive right to a specific outcome rather than as a right to a fair collective bargaining process;
• Failing to follow existing case law dealing with the constitutional validity of wage restraint legislation; and
• Its s. 1 Charter analysis. 

The Government also argued that even if Bill 124 is invalid as it relates to represented employees, the ONSC erred in declaring it void and of no effect in respect of employees who are not represented by a bargaining organization and who do not bargain collectively.

Decision of the OCA

Section 2(d) of the Charter

The OCA agreed with the ONSC when it concluded that Bill 124 substantially interfered with the respondent unions’ and labour organizations’ ability to participate in “a meaningful ‘process of consultation and good faith negotiation’” thereby infringing on their right to freedom of association under s 2(d) of the Charter.  The OCA reached this conclusion because:

• Bill 124 affected wages, “a matter of central importance to collective bargaining”;
• Bill 124 did not come after a significant or meaningful process of collective bargaining or meaningful consultation over Bill 124 itself;
• The broad definition of compensation significantly limited the areas of potential negotiation left on the table for collective bargaining;
• Bill 124 lacked a meaningful avenue for negotiating or seeking potential exemptions from the 1% cap in appropriate circumstances; and 
• The 1% cap on salary and compensation increases did not replicate collective agreements reached in other public sector bargaining.

Section 1 of the Charter

The OCA also agreed with the ONSC that Bill 124 was not saved by s. 1 of the Charter, which requires a “pressing and substantial objective, a rational connection between the means and the objective, minimal impairment of the Charter right and that the benefit of the Act outweighs its detriment.” Unlike the ONSC, the OCA accepted that “the Act pursues a pressing and substantial objective”; in its 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.” The OCA noted:

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 OCA also found that the means used by Bill 124 were “generally rationally connected to its goals.”’  Like the ONSC, the OCA found that Bill 124 was not “minimally impairing” and rather its “salutary effects [we]re outweighed by its detrimental effects.”

Finally, the OCA found that the ONSC erred in striking the whole statute.  In its view, Bill 124 applied to represented and non-represented employees.  The OCA was of the opinion that, “the rights protected by s. 2(d) of the Charter do not apply in the same way to non-represented employees.”  The OCA found that “the Act is only unconstitutional in so far as it applies to the represented employees covered by the Act” and held that the ONSC erred when it struck the statute in its entirety.

Repeal of Bill 124 in Its Entirety

As noted, on February 23, 2024, the Government repealed Bill 124 in its entirety through an Order in Council, stating that doing so “will solve for the inequality of workers created by the recent court decision.”  Accordingly, the OCA decision will not affect unrepresented employees and their employers.