Federal Government Introduces Legislation to Ban Replacement Workers in Labour Disputes

On November 9, 2023, the federal government introduced Bill C-58, An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, 2012 in the House of Commons. If enacted, Bill C-58 would impose a broad prohibition on the use of replacement workers during lawful strikes and lockouts in federally regulated workplaces, and make significant changes to the existing "maintenance of activities" process.

In this bulletin, we provide an overview of the main features of Bill C-58.

To be clear, the new potential requirements summarized below do not apply to provincially regulated workplaces.

Ban on Replacement Workers

Bill C-58's proposed prohibition on replacement workers has the following notable features:

  • Prohibited Workers: The following individuals would not be permitted to perform bargaining unit work during a strike or lockout if they were hired after notice to bargain was given:
    • Any employee (including non-union employees);
    • Any person who performs management functions; and,
    • Anyone employed in a confidential capacity related to labour relations.
  • Prohibited Contractors/Agency Employees: In addition, (1) any contractor other than a "dependent contractor;" and (2) any employee of another employer (e.g. an agency worker), would also be prohibited from working.

However, a contractor or agency employee who performed bargaining unit work for the employer before notice to bargain was given may continue to perform that work during a strike or lockout so long as they do so in the same manner, to the same extent, and in the same circumstances as they did before notice to bargain was given.

  • No Crossing Picket Lines: Bargaining unit employees would be prohibited from working during the strike or lockout even if they wish to work.
  • Exception for Threat, Destruction, or Damage: An employer may use prohibited replacement workers or contractors (as identified above) or bargaining unit employees to deal with a situation involving an imminent or serious:
    • Threat to the life, health, or safety of any person;
    • Threat of destruction of, or serious damage to, the employer's property or premises; or,
    • Threat of serious environmental damage affecting the employer's property or premises.
  • Penalty: An employer who uses prohibited replacement workers or contractors/agency employees, or allows bargaining unit employees to cross the picket line to work, is liable on summary conviction for fines up to C$100,000 per day.

Maintenance of Activities Changes

Bill C-58 would also make significant changes to the Canada Labour Code's "maintenance of activities" process, which ensures essential services are continued during labour disputes. Perhaps most notably, the legislation would require an employer and union to reach a maintenance of activities agreement early in collective bargaining, and prohibit strike or lockout activity before an agreement is in place.

The legislation would make the following major changes to the current maintenance of activities process:

  • Requirement for Agreement: Bill C-58 would establish a requirement that a union and employer enter into a maintenance of activities agreement within 15 days of giving notice to bargain. The agreement must set out:
    • The supply of services, operation of facilities, or production of goods that the parties consider necessary to continue in a strike or lockout; and
    • The manner and the extent to which the employer, the union, and the employees in the bargaining unit must continue that supply, operation, and production, including the approximate number of employees that are required for this purpose.

The parties must enter an agreement even if the agreement states that no services, operations, or production must be continued in a strike or lockout.

  • Board Application: If the parties do not reach agreement, then the Canada Industrial Relations Board must, on an application made by either party, determine all maintenance of activities issues. The Minister of Labour would also have the power to refer any maintenance of activities question to the Board.
  • Timeline and Process for Decision: The Board would need to issue its decision in a maintenance of activities application or Ministerial referral no later than 90 days after receiving the application or referral. The Board would have the power to appoint an external adjudicator to deal with maintenance of activities applications.
  • No Strike/Lockout: A union or employer could only issue a 72-hour strike or lockout notice if:
    • The union and employer have entered into a maintenance of activities agreement and filed it with the Minister of Labour and the Board; or
    • The Board has determined a maintenance of activities application or referral (if the parties have been unable to reach agreement).

If passed, Bill C-58 will come into force 18 months after it receives royal assent.

Impact on Federal Employers

At this time, the precise impact of a replacement workers ban on federal employers is unclear. However, British Columbia and Quebec have each had replacement worker bans in place for some time, and evidence from those jurisdictions should be very concerning for federal employers, and Canadians more generally. Among other reasons, the evidence indicates that a replacement worker ban increases both the length and number of labour disputes/work stoppages.

As well, the changes to the maintenance of activities process threaten to place serious additional strain on the Canada Industrial Relations Board, which already faces a huge caseload.

In light of the fact that many federal sector workplaces are 24/7 operations that provide basic services to Canadians, we anticipate Bill C-58 will have a profound impact on Canada's national infrastructure. We will keep you updated on future developments on this important topic.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.