The Ontario government will repeal a wage-cap law on public sector workers the Court of Appeal found unconstitutional on February 12.Bill 124 capped salary increases for public sector workers at 1% per year for three years. A lower court struck it down as unconstitutional and the Appeal Court, in a 2-1 decision agreed that the infringement couldn't be justified."Because of the Act, organized public sector workers, many of whom are women, racialized and/or low-income earners, have lost the ability to negotiate for better compensation or even better work conditions that do not have a monetary value," the court wrote in its majority opinion.Doug Ford's Progressive Conservative government enacted the law in 2019 as a way to help the government eliminate a deficit. In a news release, the Ontario government said it will not appeal the court decision and will instead "take steps to repeal Bill 124 in its entirety in the coming weeks."To solve for the inequality of workers created by today's court decision, the province will urgently introduce regulations to exempt non-unionized and non-associated workers from Bill 124 until it is repealed," the release said.The Ontario Appeal Court ruled that governments can try to hold compensation increases to a certain level, but the issue is how they do that."Ontario has not been able to explain why wage restraint could not have been achieved through good faith bargaining," the court wrote."In the absence of any evidence for the need for expediency or that the same goal cannot be achieved through collective bargaining, it is hard to understand on what basis the Act's salutary effects outweigh its beneficial effects."The Appeal Court found that the lower court judge erred by striking the entire statute. The law applied both to unionized workers and those not represented by a bargaining organization; the Appeal Court said the act is only unconstitutional for workers represented by unions, who have different rights because they bargain collectively.In his dissenting opinion, Justice C. William Hourigan wrote that the government had legitimate economic reasons for imposing wage restraint, and that doing so prevented the loss of services or jobs."According to the application judge's analysis, it would be permissible for the government to temporarily reduce wage costs when the economy was on the brink of collapse, but it would be unconstitutional for the government to act proactively to prevent the inevitable," Hourigan wrote."If a government sees an economic cliff on the horizon, courts should not require it to wait till the last moment to act."Ontario's financial accountability officer said in 2022 that Bill 124 would save the province $9.7 billion on public-sector salaries and wages, but predicted a successful court challenge would cost the province $8.4 billion over five years.Though the 2019 law was limited to a three-year period, it has continued to affect collective bargaining because of when some previous contracts expired and the length of some negotiations.The government had already moved to compensate for its one per cent increases. On February 9, the province announced that elementary and high school teachers would get a one-year retroactive bump of 2.75% in pay. In January, an arbiter awarded Ontario public servants retroactive pay increases of 6.5% due to the lower court ruling that Bill 124 was unconstitutional.
The Ontario government will repeal a wage-cap law on public sector workers the Court of Appeal found unconstitutional on February 12.Bill 124 capped salary increases for public sector workers at 1% per year for three years. A lower court struck it down as unconstitutional and the Appeal Court, in a 2-1 decision agreed that the infringement couldn't be justified."Because of the Act, organized public sector workers, many of whom are women, racialized and/or low-income earners, have lost the ability to negotiate for better compensation or even better work conditions that do not have a monetary value," the court wrote in its majority opinion.Doug Ford's Progressive Conservative government enacted the law in 2019 as a way to help the government eliminate a deficit. In a news release, the Ontario government said it will not appeal the court decision and will instead "take steps to repeal Bill 124 in its entirety in the coming weeks."To solve for the inequality of workers created by today's court decision, the province will urgently introduce regulations to exempt non-unionized and non-associated workers from Bill 124 until it is repealed," the release said.The Ontario Appeal Court ruled that governments can try to hold compensation increases to a certain level, but the issue is how they do that."Ontario has not been able to explain why wage restraint could not have been achieved through good faith bargaining," the court wrote."In the absence of any evidence for the need for expediency or that the same goal cannot be achieved through collective bargaining, it is hard to understand on what basis the Act's salutary effects outweigh its beneficial effects."The Appeal Court found that the lower court judge erred by striking the entire statute. The law applied both to unionized workers and those not represented by a bargaining organization; the Appeal Court said the act is only unconstitutional for workers represented by unions, who have different rights because they bargain collectively.In his dissenting opinion, Justice C. William Hourigan wrote that the government had legitimate economic reasons for imposing wage restraint, and that doing so prevented the loss of services or jobs."According to the application judge's analysis, it would be permissible for the government to temporarily reduce wage costs when the economy was on the brink of collapse, but it would be unconstitutional for the government to act proactively to prevent the inevitable," Hourigan wrote."If a government sees an economic cliff on the horizon, courts should not require it to wait till the last moment to act."Ontario's financial accountability officer said in 2022 that Bill 124 would save the province $9.7 billion on public-sector salaries and wages, but predicted a successful court challenge would cost the province $8.4 billion over five years.Though the 2019 law was limited to a three-year period, it has continued to affect collective bargaining because of when some previous contracts expired and the length of some negotiations.The government had already moved to compensate for its one per cent increases. On February 9, the province announced that elementary and high school teachers would get a one-year retroactive bump of 2.75% in pay. In January, an arbiter awarded Ontario public servants retroactive pay increases of 6.5% due to the lower court ruling that Bill 124 was unconstitutional.
