{"id":6273,"date":"2022-12-05T14:36:00","date_gmt":"2022-12-05T19:36:00","guid":{"rendered":"https:\/\/www.millerthomson.com\/bill-124-declared-unconstitutional\/"},"modified":"2025-12-29T17:15:10","modified_gmt":"2025-12-29T22:15:10","slug":"bill-124-declared-unconstitutional","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/labour-and-employment\/bill-124-declared-unconstitutional\/","title":{"rendered":"Bill 124 declared unconstitutional"},"content":{"rendered":"\n

On November 29, 2022, the Ontario Superior Court of Justice ruled[1]<\/a> that Bill 124, Ontario\u2019s public sector wage restraint legislation, is unconstitutional. As a result, the Court declared the statute void and of no effect. The provincial government has announced its intention to appeal this decision.<\/p>\n\n\n\n

This development has been the subject of significant media focus and has major implications for public sector employers. Below, we review key aspects of the decision and relevant takeaways for employers going forward.<\/p>\n\n\n\n

Background<\/h2>\n\n\n\n

Bill 124 \u2013 formally, the Protecting a Sustainable Public Sector for Future Generations Act, 2019 <\/em>(the \u201cAct\u201d) \u2013 came into force in 2019. It imposed a three-year moderation period on salary and compensation for approximately 780,000 workers in Ontario, including employees of the Ontario public service, school boards, post-secondary institutions, hospitals and other employers in the broader public sector. During an employer\u2019s moderation period, wages and salaries could not be increased by more than one percent per year (with some exceptions). Further, compensation, which includes salary, wages and benefits, could not be increased by more than one percent per year on average for all employees.<\/p>\n\n\n\n

The decision<\/h2>\n\n\n\n

Various labour organizations (the \u201cApplicants\u201d) challenged the constitutionality of the Act, arguing that it limited the Applicants\u2019 freedom of association, freedom of speech, and equality rights under the Canadian Charter of Rights and Freedoms<\/em> (the \u201cCharter\u201d).<\/em><\/p>\n\n\n\n

The Court found that the Act infringed the Applicants\u2019 rights to freedom of association under section 2(d) of the Charter, which the Supreme Court of Canada has recognized includes the right to engage in collective bargaining and the right to strike. By preventing collective bargaining for wage increases in excess of 1%, the Act interfered with the Applicants\u2019 ability to engage in collective bargaining. The Court held that, in addition to limiting the extent to which the Applicants could bargain over wage increases, the Act prevented the Applicants from trading off salary demands against non-monetary benefits or addressing staff shortages in collective bargaining. Further, the Act interfered with the usefulness of the right to strike, the independence of interest arbitration, and the overall power balance between employer and employees.<\/p>\n\n\n\n

Together, these detrimental effects substantially interfered with collective bargaining. Moreover, this interference could not be justified under section 1 of the Charter. In finding that no justification for the interference was established, the Court held:<\/p>\n\n\n\n