Divisional Court Affirms that Most Recent Amendments to Non-Construction Employer Provisions of the Labour Relations Act, 1995 do not Infringe Right to Freedom of Association  

Recently, in Carpenters’ District Council of Ontario v. City of Hamilton, Ontario’s Divisional Court released its decision in a case addressing the constitutionality of the most recent amendments to the non-construction employer (or “NCE”) provisions in the Labour Relations Act, 1995 (the “Act”). More specifically, the Carpenters’ District Council of Ontario (the “Union”) sought to challenge the constitutionality of section 127, a deeming provision in the Act, on the basis that it infringed the right to freedom of association guaranteed by the Canadian Charter of Rights and Freedoms (the “Charter”).

Background

In the Act, several construction-specific provisions set out a specialized regime for the construction industry in Ontario. This includes a specific bargaining scheme for unions for building trades in the industrial, commercial and institutional (or “ICI”) sector of the construction industry, pursuant to which designated employer and employee bargaining agencies engage in collective bargaining to negotiate collective agreements with province-wide application. As evidenced by their name, NCEs are not subject to this specialized regime.

In July of 2019, Bill 66, Restoring Ontario’s Competitiveness Act, 2019, came into force. Bill 66 amended section 127 of the Act to deem certain entities – such as municipalities, school boards, colleges and universities – to be NCEs. By virtue of this amendment, the respondent municipalities of Hamilton, Waterloo and Sault Ste. Marie were deemed to be NCEs. Consequently, the Union no longer represented any of their employees in the ICI sector and the Carpenters’ Provincial Collective Agreement (the “PCA”) was no longer binding on the parties.

The Union initially sought to challenge the constitutionality of Bill 66 on the basis that it contravened the right to freedom of association protected by section 2(d) of the Charter through the grievance procedure. However, the respondent municipalities were of the view that because of Bill 66, the PCA no longer bound the parties. The grievances were therefore referred to arbitration before the Ontario Labour Relations Board (the “Board”).

Decision of the Board

At arbitration, the Board held that it was bound by the Ontario Court of Appeal’s decision in Independent Electricity System Operator v. Canadian Union of Skilled Workers (“IESO”). In that case, the court held that section 127.2 of the Act, which is a provision allowing an employer to apply to be declared to be an NCE, did not infringe the right to freedom of association guaranteed by the Charter. The Board concluded that the factual distinctions between IESO and the present case were not significant enough to distinguish the latter from the former. Furthermore, the Board was not persuaded that the law had developed since IESO in a manner that would distinguish the current case. In any event, the Board concluded that regardless of IESO, there was no breach of section 2(d) of the Charter.

The Union initially filed a request for reconsideration of the Board’s decision, but it was dismissed. The Union subsequently filed an application for judicial review before the Divisional Court.

Divisional Court Decision

In its submissions to the panel of the Divisional Court, the Union argued that the Board had erred in its treatment of IESO. In its view, IESO was decided specifically on its own facts, and the facts at hand in the present case were different. The Union also argued that in IESO, the Court of Appeal had applied the wrong legal test under section 2(d) of the Charter. Finally, the Union argued that the Board erred in otherwise finding that section 127 of the Act did not violate the right to freedom of association protected by the Charter because it failed to appreciate the “cumulative impact” of Bill 66.

The Divisional Court ultimately dismissed the Union’s application for judicial review. It held that the Board had correctly concluded that IESO was directly on point and that it was bound by that decision. IESO was a constitutional challenge to section 127.2 of the Act. Under this provision, an employer may bring an application to the Board to be declared an NCE. Upon such a declaration, the union no longer represents any employees of the NCE employed in the construction industry and the provincial collective agreement no longer applies. In other words, the consequences of a declaration are the same as the impact of the Bill 66 amendments on the respondent municipalities in this case. As noted by D.L. Corbett JJ, writing for the panel:

… [The Board] relied on the principle of vertical stare decisis set out in Canada (Attorney General) v. Bedford, 2013 SCC 72, at para. 42 to correctly conclude that there was no change in the circumstances or evidence between this case and IESO that would fundamentally shift the parameters of the debate. 

The Divisional Court also held that the Board had correctly applied Supreme Court of Canada case law to conclude that there was no infringement of the right to freedom of association guaranteed by the Charter. The Union had specifically taken issue with the fact that in IESO, the court had allegedly applied a legal test from Ontario (Attorney General) v. Fraser (“Fraser”), which was whether the government action or legislation made it “impossible” to act collectively to achieve workplace goals. The Union submitted that that the test in Fraser was no longer correct on the basis that the Supreme Court of Canada had clarified in Mounted Police Association of Ontario v. Canada (Attorney General) (“MPAO”) that the test was instead whether the government action or legislation constituted “substantial interference” with collective action. Finding that the Board had correctly dismissed this argument, the Divisional Court indicated that in MPAO, the Supreme Court of Canada explained that the Fraser decision used the term “impossible” to describe the effect of the legislative scene at issue, not the legal test. In fact, in MPAO, the Supreme Court of Canada explicitly confirmed that the majority in Fraser had adopted “substantial interference” as the legal test under section 2(d) of the Charter. Accordingly, contrary to what was alleged by the Union, MPAO confirms that there has been no development in the legal test to be applied; it was, and remains, “substantial interference” with the right to a meaningful process of collective bargaining.

Finally, even if IESO was not determinative in this case, the Divisional Court held that the Board had correctly concluded that there was no infringement of the right to freedom of association under section 2(d) of the Charter. It indicated that the Supreme Court of Canada has repeatedly confirmed that section 2(d)’s protection of collective bargaining protects the right to a process, and not to a particular collective bargaining outcome or model of labour relations. There was therefore no constitutional entitlement to the construction-specific provisions of the Act, as the Union’s members continued to have access to the general collective bargaining process provided for in the Act.

In Our View

This decision affirms that the most recent amendments to the NCE provisions of the Act do not infringe the constitutional right to freedom of association guaranteed by the Charter. Accordingly, municipalities across the province can rest assured that they continue to properly be deemed to be NCEs under the Act and, as a result, that they are not bound by the terms of the construction industry’s province-wide collective agreements.

For more information, please contact Paul Lalonde at 613-940-2759 or Neil Dzuba at 613-940-2757.