General remarks
- Coming into force. On June 20, 2024, Bill C-58, An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, 2012 (Bill C-58) received Royal Assent. Bill C-58 will come into force on June 20, 2025.
- Prohibition. Bill C-58 prohibits employers from using, during a legal strike or lockout intended to involve the cessation of work by all employees in a bargaining unit, the services of employees in that unit, subject to certain exceptions.
- Penalties. As per s. 100.1 of the Canada Labour Code (the “Code”) as amended by Bill C-58, an employer who contravenes the Code’s provision against the use of replacement workers is liable on summary conviction to a fine of up to $100,000 for each day during which workers are used illegally.
- Requirement of demonstrating a purpose. Bill C-58 amends the scope of the prohibition relating to replacement workers by removing the requirement of demonstrating a purpose of undermining a trade union’s representational capacity.
Regardless of an employer’s purpose in using replacement workers, the amended Code prohibits the use of various persons to perform any of the duties normally carried out by bargaining unit employees that are locked-out or on strike. The following groups of people cannot be used as replacement workers to perform such duties:
- Employees or contractors (except dependent contractors) hired after the day on which notice to bargain collectively was given;
- Managers or persons employed in a confidential capacity in matters related to industrial relations hired after the day on which notice to bargain collectively was given;
- Transferred employees, employees normally working at another workplace or employees of another employer;
- Volunteers, students or members of the public.
Employers still have options
- Contractor services already used. Bill C-58 permits contractors services to be continued to be used by employers, if they were used before the day on which notice to bargain collectively was given. Said services can be used throughout a strike or lockout involving the unit, so long as they do so in the same manner, to the same extent and in the same circumstances as they did before the notice was given (section 94 (5) of the Code).
When contemplating a conflict situation where a strike or lockout is foreseeable, employers may retain the services of contractors to carry out the activities under risk of being jeopardized. Such a tactic, already open to employers before Bill C-58’s amendments, would have considerable impact on costs as it implies surplus workers for a certain period, before the collective bargain notice is given. Further, this comes with the far heavier strategic risk of setting the wrong tone to the impending negotiations.
- Dependent contractors. The prohibition on the use of replacement workers does not extend to the use of dependent contractors. Employers could therefore restore their workforce after notice to bargain collectively has been given.
A dependent contractor is defined in section 3 of the Code and refers, inter alia, to any person “who, whether or not employed under a contract of employment, performs work services for another person on such terms and conditions that they are, in relation to that other person, in a position of economic dependence on, and under an obligation to perform duties, for that other person”.
The Code’s definition of a dependent contractor focuses on two elements which tend to characterize a standard employment relationship, namely the presence of an economic dependence and control over the performance of duties. Economic dependence implies a level of complete or near-complete exclusivity in the provision of services.
The definition of a dependent contractor is not straightforward. Employers wishing to retain the services of dependent contractors will want to carefully assess the terms of their agreements to ensure that they fall outside the scope of Bill C-58’s amendments.
Closing comments
- Deemed insufficient in scope by unions and too broad by employers, Bill C-58 is an unnecessary piece of legislation that risks harming economic competition throughout the country. By putting its thumb on the scale, Parliament needlessly alters the delicate balance of labour relations in Canada. Few clues are available to understand the choices made when drafting this new Law, in particular as to why Parliament decided to distance itself from provincial “anti-scab” legislation in British Columbia and Quebec.
- In the next instalment of our series, we will further discuss some of the new features, as well as differences with Quebec’s legislation.
