Ontario Superior Court of Justice Declares Bill 124 Void and of no Effect

On November 29, 2022, the Ontario Superior Court of Justice released its much anticipated decision regarding ten applications which challenged the constitutionality of the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (“Bill 124” or the “Act”), granting the constitutional challenges and declaring the Act to be void and of no effect.

Introduced in June 2019, Bill 124 imposes a 1% per year cap on wage and compensation increases for many broader public sector workers over the course of a three-year moderation period. In Ontario English Catholic Teachers Assoc. v. His Majesty, a number of labour organizations challenged the constitutionality of the legislation, arguing that it limited their members’ freedom of association, freedom of speech and equality rights under the Canadian Charter of Rights and Freedoms (the “Charter”). In response, the Ontario government denied that Bill 124 infringed on any Charter rights and took the position that even if it did, it was saved by section 1 of the Charter as a reasonable limit that was demonstrably justified in a free and democratic society.

After considering the evidence before him, Justice Markus Koehnen concluded that although Bill 124 did not violate the applicants’ freedom of speech or equality rights, it did infringe on their right to freedom of association under section 2(d) of the Charter. He explained that the right to freedom of association includes constitutional protection of the right to a meaningful collective bargaining process and the right to strike. He found that not only did Bill 124 interfere in collective bargaining in a number of ways, but that these detrimental effects amounted to a substantial interference with the right to freedom of association.

Furthermore, Justice Koehnen concluded that Bill 124 was not saved by section 1 of the Charter. He explained that justification under section 1 would require the Ontario government to establish 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 Bill 124 outweighs its detriment. In respect of the first branch of the test, he found that although the sustainable management of public resources can amount to a pressing and substantial objective, the provincial government had not succeeded in demonstrating that the economic conditions at the time of the legislation’s inception were sufficiently critical to warrant infringing on the right to freedom of association. Despite finding that the first branch of the test had not been established, Justice Koehnen nonetheless considered the three remaining branches, noting additional concerns in each instance.

In conclusion, Justice Koehnen held that Bill 124 was contrary to section 2(d) of the Charter, and was not justified under section 1 of the Charter. In the result, he declared the entire Act to be void and of no effect. Consideration of any remedy arising as a result of Bill 124 having been in effect since June 2019 was, however, deferred to a further hearing.

In Our View

This decision could have very significant consequences for employers who have bargained collective agreements under Bill 124, or who are currently doing so. That being said, Attorney General Doug Downey has already indicated an intention to appeal the outcome on behalf of the Ontario government. We will therefore continue to monitor the status of the litigation and keep our readers apprised of any future developments in that regard.

For more information, please contact Lynn Harnden at 613-940-2731, Céline Delorme at 613-940-2763 or Porter Heffernan at 613-940-2764.