Ontario strikes down wage cap law after appeals court finds Ford government's Bill 124 unconstitutional

The Ontario Court of Appeal on Monday struck down a public sector worker's pay law that it found unconstitutional.

The legislation from Premier Doug Ford's government – known as Bill 124 – capped public sector pay raises at one per cent a year for three years.

A lower court found it unconstitutional, and in a 2-1 decision, the appeals court largely upheld the ruling, writing that the violation was inexcusable.

“Because of the law, organized public sector workers, many of whom are women, racialized and/or low-income, have lost the ability to negotiate for better compensation or even better working conditions without monetary value,” it said. writes the court in the majority opinion.

The Progressive Conservatives passed legislation in 2019 to help the government close the deficit. The province argued that the law does not violate constitutional rights and that the statute protects only the negotiation process, not the outcome.

In a press release Monday, the Ontario government said it will not appeal the court's ruling and will instead “take steps to fully repeal Bill 124 in the coming weeks.

“To address the worker inequity created by today's court decision, the province will urgently introduce provisions to exempt non-union and non-associated workers from Bill 124 until it is repealed,” the statement said.

The Ontario Court of Appeal wrote that governments have the right to try to raise compensation up to a certain level, but the question is how they do it.

“Ontario has failed to explain that wage restraint cannot be achieved through good faith bargaining,” the court wrote.

“In the absence of any evidence of the need to achieve a goal through collective bargaining, or of the inability to achieve one goal, it is difficult to see on what basis the beneficial effects of the Act would outweigh its beneficial effects.”

The decision was seen as a “huge victory” for union workers

The Court of Appeal, however, found that the lower court judge erred by striking down the entire statute. The law applies to both unionized and non-bargaining workers, and the Court of Appeals held that the act was unconstitutional only for union-represented workers with different rights because of collective bargaining.

In a dissenting opinion, Judge S. William Hourigan wrote that the evidence showed very clear economic reasons for limiting wages and that the government did so rather than cut services or jobs.

“According to the motion judge's analysis, it is permissible for the government to temporarily reduce payroll costs when the economy is on the brink of recession, but it would be unconstitutional for the government to act proactively to prevent the inevitable,” Hourigan wrote.

“If the government sees an economic downturn on the horizon, the courts should not require it to wait until the last minute to act.”

The law has sparked widespread outrage among labor groups and opposition parties, with its impact on the health sector in particular, as critics say it is partly responsible for sending nurses out of the profession or into private nursing agencies, where wages are significantly higher. for that job.

“This bogus bill has had a profound impact on access and quality of care for Ontarians starting in 2019,” said Erin Aris, provincial president of the Ontario Nurses Association.

“The injury to nurses and health care professionals caused by Bill 124 has driven tens of thousands of people away from the health care system and the jobs we love.”

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Monday's decision was hailed as a major victory for union workers.

“I feel like most of the broader public sector workers in Ontario have been vindicated,” said Stephen Barrett, a lawyer for the Ontario Federation of Labor on the case.

“The appeals court is clear that the protection of freedom of association and the right to collective bargaining and to strike is meaningful.”

Paul Cavalluzzo, a spokesman for the English Catholic Teachers Association of Ontario, said he personally destroyed the government's financial statements.

“Of course, now the government's books show that this legislation is unnecessary, that we were in a redundant situation,” he said.

“They didn't even spend budget money on health and education – the bill wasn't needed.”

In a joint statement, two unions representing health care workers said Monday's decision was a victory for families and all unions that have fought to protect workers' right to collective bargaining.

“We call on Doug Ford to end his attacks on the very people we need to fix Ontario's deteriorating health care system,” wrote the presidents of CUPE Ontario Council of Hospital Unions and SEIU Healthcare.

The province's public elementary teachers' union said the government should never have appealed the decision because it “wasted” taxpayer dollars and undermined their recent contract negotiations.

“Let the court's decision serve as a lesson to the Ford government to never circumvent trade or trample on the democratic rights of workers,” wrote the Ontario Federation of Elementary Teachers.

The government has gained little from the law, the union says

JP Hornick, president of the Ontario Public Employees Union, said the government had little to gain from the legislation.

“They've lost not only the respect of workers, but they've lost the exponential life that we as workers have to achieve,” Hornick said.

“What they have achieved is a revitalized labor movement.”

Since the repeal of the law, even pending appeals, arbitrators have awarded additional retroactive pay to several groups of workers with “reopening” clauses in their contracts, including teachers, nurses, other hospital workers, civil servants, ORNGE air ambulance paramedics. and college teachers.

Several hospitals told a legislative committee that holds pre-budget hearings that arbitration rulings to reopen Bill 124 are straining their budgets, but the government has pledged to reimburse them.

“The 124 bill is putting hospitals under extreme cash flow challenges, threatening our financial viability and forcing us to delay capital purchases,” Kingston Health Sciences Center board chair Sherry McCullough said last month.

Ontario's financial accountability officer said Bill 124 would save the province $9.7 billion in public sector wages and salaries by 2022, though a successful court ruling would wipe that all out.

That could cost the province $8.4 billion over five years, he said.

Although the 2019 law is limited to three years, it still affects collective bargaining due to the expiration of some previous contracts and the length of some negotiations.