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Appeal Court upholds overturning most of public sector wage-cap law

Bill 124, passed by Doug Ford's PCs in 2019, limited most Ontario public sector employees' annual raises to one per cent for three years
Nurses and their supporters protest against Ontario's Bill 124 on the sidewalk in front of the constituency office of then-PC MPP for Ottawa West-Nepean Jeremy Roberts in Ottawa, on March 4, 2022.

Editor's note: This article originally appeared on The Trillium, a Village Media website devoted exclusively to covering provincial politics at Queen’s Park.

The Ontario Court of Appeal upheld the bulk of a previous ruling that found the Ford government’s legislation capping public sector wage increases was unconstitutional. 

The court made its ruling Monday in a 2-1 decision, with Appeal Court Justice Lise Favreau writing in the decision that “I cannot accept that the circumstances surrounding the government’s decision to enact the legislation justify its infringement of the Charter.”

“Taking into consideration the context in which Bill 124 was introduced and the restraints imposed by the Act, I am satisfied that the Act substantially interferes with the respondents’ right to participate in good faith negotiation and consultation over their working conditions,” wrote Favreau. 
However, she added that the earlier decision made by Justice Markus Koehnen of Ontario’s Superior Court was “overly broad,” and that striking Bill 124 down “should be limited to a declaration that the Act is unconstitutional in so far as it applies to (union) represented employees.”

Non-unionized workers are a minority of the 400,000 employees of the government and broader public sector organizations affected by the law.

The Ford government has not yet announced if it will seek to appeal Monday's decision at the Supreme Court of Canada. 

It introduced Bill 124 in June 2019, one year after taking office. The legislation was passed that November. 

While the government said the legislation established “a fair and reasonable approach to managing compensation, as the government tackles Ontario's debt," labour groups were irate about the law that limited wage increases in the public sector to one per cent a year for a maximum of three years, and decided to take the province to court. 

Koehnen’s Ontario Superior Court ruling struck down the law as unconstitutional in November 2022 and the government then appealed the decision. 

On Monday, labour unions applauded the Ontario Court of Appeal’s decision. 

CUPE’s Ontario Council of Hospital Unions, SEIU Healthcare and Unifor issued a statement calling the ruling a “win for all hardworking families who are trying to get ahead and all unions who fought on their behalf to protect the rights of all workers to freely bargain a collective agreement.”

They called on the Ford government to “end all wage restraint schemes and let Bill 124 go.”

The legislation affected teachers, health-care staff, public servants and others, though some groups have been awarded retroactive pay increases above the one per cent cap through recent collective bargaining and arbitration triggered when the bill was first declared unconstitutional by the Superior Court.  

For instance, on Friday, an arbitrator decided teachers and education workers with two unions would get a retroactive wage increase of 2.75 per cent for the third year of their previous contracts. Additional wage bumps for the first two years were decided on with the province. 

More to come