{"id":6594,"date":"2024-02-13T15:04:59","date_gmt":"2024-02-13T20:04:59","guid":{"rendered":"https:\/\/www.millerthomson.com\/ontario-court-of-appeal-bill-124-unconstitutional-employees-unions-non-represented-employee\/"},"modified":"2025-06-30T17:38:30","modified_gmt":"2025-06-30T21:38:30","slug":"ontario-court-of-appeal-bill-124-unconstitutional-employees-unions-non-represented-employee","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/labour-and-employment\/ontario-court-of-appeal-bill-124-unconstitutional-employees-unions-non-represented-employee\/","title":{"rendered":"Ontario Court of Appeal: Bill 124 unconstitutional for employees represented by unions; valid for non-represented employee"},"content":{"rendered":"\n

On November 29, 2022 the Ontario Superior Court of Justice declared that Bill 124 (Ontario\u2019s public sector wage restraint legislation) was unconstitutional, void, and of no effect (discussed in our previous Communiqu\u00e9<\/a>). Subsequently, the Ontario Government appealed this court decision.<\/p>\n\n\n\n

On February 12, 2024, a majority of the Ontario Court of Appeal found that Bill 124 is unconstitutional and invalid in so far as it applies to affected broader public sector employees who are represented in the workplace by unions (decision linked here<\/a>).  The Court of Appeal, however, found that Bill 124 is constitutional and valid in its application to affected broader public sector employees who are not<\/strong> represented in the workplace by unions.<\/p>\n\n\n\n

Bill 124 and the court challenge 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 the Protecting a Sustainable Public Sector for Future Generations Act, 2019<\/em> (the \u201cAct\u201d) \u2013 came into force in 2019. The Act imposed a one percent annual cap on increases to salary and compensation for employees in the broader public sector (with some exceptions) for a period of three years. The Act applied to approximately 780,000 unionized and non-unionized employees in Ontario, including employees of the Ontario public service, school boards, post-secondary institutions, hospitals, licensed not-for-profit long-term care homes, children\u2019s aid societies, and other employees in the broader public sector.<\/p>\n\n\n\n

Decision of the Lower Court<\/h2>\n\n\n\n

After various labour organizations (the \u201cApplicants\u201d) challenged the constitutionality of the Act, the Ontario Superior Court of Justice ruled that the Act infringed the Applicants\u2019 right to freedom of association under section 2(d) of the Canadian Charter of Rights and Freedoms<\/em> (the \u201cCharter\u201d). The Supreme Court of Canada has previously recognized that section 2(d) of the Charter includes the right to engage in collective bargaining and the right to strike. The Court found that the Act interfered with the Applicants\u2019 ability to engage meaningfully in collective bargaining by preventing collective bargaining for wage increases in excess of one percent. Finding that the negative effects of the Act outweighed its benefits, the Court determined that this interference could not be justified under section 1 of the Charter.<\/p>\n\n\n\n

Decision of the Court of Appeal<\/h2>\n\n\n\n

The majority opinion of the Court of Appeal, as written by Favreau J.A., agreed with the Lower Court that the Act violates the section 2(d) Charter rights of broader public sector unionized employees in Ontario and that, in this respect, it is not saved by section 1 of the Charter. The majority opinion held that the Act substantially interfered with the Applicants\u2019 right to participate in good faith negotiation and consultation over their working conditions. The Province sought to draw parallels between the Act and other provincial and federal wage restraint legislation that had been previously found to be constitutional.  However, the Court of Appeal distinguished such legislation from the Act, because:<\/p>\n\n\n\n