Update: Changes to the Canada Labour Code prohibiting the use of replacement workers

On November 9, 2023, the federal government introduced legislation which would ban the use of replacement workers in federally-regulated sectors during strikes and lockouts. This is the latest in a series of recent or anticipated changes to the Canada Labour Code, RSC 1985, c L-2 (the “Code”).

Bill C-58, An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, 2012, was tabled by Labour Minister Seamus O’Reagan, in furtherance of the supply and confidence agreement between the federal Liberal and NDP political parties. It was put forward for a second reading on November 22, 2023.

Bill C-58 will prohibit federally-regulated employers from using the services of:

• any employee or any person who performs management functions or who is employed in a confidential capacity in matters related to industrial relations; or
• any contractor or dependent contractor

to perform the duties of an employee who is part of a bargaining unit that is on strike or locked out (the “Prohibition”).

If a manager or contractor was already performing similar work as a bargaining unit employee before the notice to collectively bargain is given, the manager or contractor may continue to perform those duties in the event of a strike or lockout.

Additionally, an employer may hire a replacement worker in a situation that could present an imminent or serious threat to life, personal health or safety, serious damage to an employer’s property, or serious environmental damage to the employer’s property.

The penalty for contravening the Prohibition is a fine of up to $100,000 for each day the offence is committed, enforced by the Head of Compliance and Enforcement at the Labour Program of Employment and Social Development Canada.

Bill C-58 would also create a new mandatory bargaining requirement for employers and unions. Under the proposed legislation, an employer and a union must agree on the supply of services, operation of facilities, or production of goods that are necessary to continue during a strike or lockout. Despite the complex (and likely contentious) nature of this bargaining requirement, parties must reach an agreement within 15 days after a notice to bargain collectively is given. If an agreement is not reached within 15 days, the Canadian Industrial Relations Board will decide for the parties, within 90 days.

Approximately 34% of federally regulated workers are unionized, including workers in many nationally important sectors. Employers and organizations that depend on uninterrupted trade may have serious concerns that the Prohibition may lead to more frequent and longer strikes. This may negatively affect supply chains and investment in Canadian businesses.

As drafted, Bill C-58 will come into force 18 months after it receives royal assent. Reach out to one of McDougall Gauley’s Labour and Employment lawyers for trusted labour and employment advising.