Wage-cap law does not infringe on Charter, Ontario says in Bill 124 case

Public-sector workers' constitutional bargaining rights are not infringed by Ontario's wage-cap law, the province told court Monday.

Groups representing hundreds of thousands of public sector employees are challenging the constitutionality of Bill 124, a law passed in 2019 that limits wage increases at one per cent per year for Ontario Public Service employees as well as broader public sector workers.

The case began last week and has heard from unions representing government workers, teachers, nurses and university faculty among others.

They argue the law has taken away meaningful collective bargaining, thereby violating the Canadian Charter of Rights and Freedoms.

The province argues the Charter protects only the process of bargaining and not the outcome.

"That's what the law does, it constrains an outcome," said government lawyer Zachary Green.

"Within that substantive constraint on what your salary can look like at end of bargaining, the applicants remain free to engage in a process of meaningful bargaining."

The provisions of the bill were to be in effect for three years as new contracts were negotiated, and the Tories had said it was a time-limited approach to help eliminate the deficit.

Green said the law does not prevent workers from joining together to bargain, has not prevented back-and-forth negotiations and recourse, like a strike or arbitration, are still available.

"These measures are exceptional and time limited," he said.

"In other words, they are not the new normal, they are temporary measures needed to slow the rate of growth of compensation."

 After the moderation period, bargaining can resume without a cap, Green said, although there is a provision in the law that does not allow for make-up compensation for the wage-capped years.

Court has heard the law affects more than 700,000 workers in the province. It does not apply to municipalities, First Nations and Indigenous communities, and for-profit companies.

Green said the goal of the legislation was to ensure sustainability of services in wake of financial problems for the province and to avoid layoffs of public-sector workers.

"The moderation period could not achieve its goal if it allowed for unlimited compensation growth," Green said.

The province pointed to a few similar cases to support its arguments.

Green said the federal Expenditure Restraint Act, which came about in 2009 in response to the financial crisis, capped wages of federal workers. There was a Charter challenge in that case as well on similar grounds.

The Court of Appeal found that the federal act did not substantially interfere with meaningful collective bargaining.

The most recent case came out of Manitoba, where that province's Court of Appeal found wage-cap legislation on broader public sector workers did not violate the Charter.

This report by The Canadian Press was first published Sept. 19, 2022.