The Ontario Court of Appeal ruled on Monday that provincial legislation in the central Canadian province that capped public-sector workers’ wages is unconstitutional. This decision upheld the Ontario Supreme Court’s ruling in November 2023.

The court found that the act interfered with represented employees’ rights to negotiate for higher wages, stating, “I am satisfied that the Act substantially interferes with the respondents’ right to participate in good faith negotiation and consultation over their working conditions.”

In 2019, the Ontario legislature passed Bill 124, known as the Protecting a Sustainable Public Sector for Future Generations Act, 2019. The legislation imposed a cap of one percent per year on increases to salary rates and compensation for employees in the broader public sector. It operated the limits through moderation periods that were for three years. The beginning of the moderation period depended upon whether the employee was represented or not and if there was already a collective agreement in place.

Unifor, a union for private sector workers, reported, “Bill 124 impacts more than 18,155 Unifor members in hospitals, non-profit long-term care homes, paramedic services, social services, and in education.”

At the end of 2023, the case was initially brought to the Ontario Supreme Court by numerous unions and organizations that represent employees in the broader public sector, including teachers and nurses. The groups challenged the constitutionality of Bill 124 on the basis that it violated the rights of those that they represented. In particular, their right to freedom of expression, freedom of association and equality under the Canadian Charter of Rights and Freedoms.

The Applicants for the appeal argued that there was a defense under section 1 of the Charter that “guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.” The government bears the onus of pricing that the law is a reasonable limit on that right. The court decided that the act was not saved by section 1, finding “the Act is not saved by s. 1 of the Charter because it does not minimally impair the respondents’ right to freedom of association, and because the Act’s deleterious effects outweigh its benefits.”

Unifor National President Lana Payne expressed approval of the decision, stating:

This decision is vindication for the tens of thousands of workers, many of them working in health care and education, who were denied their constitutional right to fair and free collective bargaining. It also sends a strong and clear message to governments across this country considering using legislative powers to deny workers’ rights.