$100,000 a day: Ottawa threatens steep fines for federal employers that violate proposed "anti-scab" legislation

On November 9, 2023, Labour Minister Seamus O'Regan introduced Bill C-58, An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, which aims to tighten the rules surrounding the use of replacement workers, often known as "scabs," in federally regulated workplaces during a strike or lockout.

Bill C-58 will therefore greatly impact federally regulated employers and this bulletin aims to provide such employers with a general understanding of Bill C-58 and its potential implications.

Overview

Most significantly, Bill C-58 proposes to greatly expand the Canada Labour Code's prohibition against the use of replacement workers.

In its present form, Bill C-58 intends to prohibit employers from using the services of any of the following persons to perform all or part of the duties of an employee who is in a bargaining unit on strike or lockout[1]:

1. Any employee included in the bargaining unit on strike or lockout
2. Any employee or any person who performs management functions or who is employed in a confidential capacity in matters related to industrial relations if that employee or person is hired after the day on which notice to bargain collectively is given
3. Any contractor other than a dependent contractor or any employee of another employer, except if the employer was already using their services before the day on which notice to bargain collectively was given[2]

With respect to the latter provision, it should be noted that employers using the services of a contractor or an employee of another employer must keep using their services in the same manner, to the same extent and in the same circumstances as they did before the notice to bargain collectively was given.

Furthermore, Bill C-58 proposes to repeal the requirement for unions to demonstrate that replacement workers were used to undermine a union's representational capacity, as opposed to the pursuit of legitimate bargaining objectives[3].  

Exceptions

The Canada Labour Code already provides that employees in the bargaining unit on strike must continue to work to the extent necessary to prevent an immediate and serious danger to public safety or health[4].

Bill C-58 adds to this exception by providing that an employer may use the services of a person referred to above if the services are used solely to deal with situations that present, or could reasonably be expected to present, an imminent or serious[5]

• threat to the life, health or safety of any person;
• threat of destruction of, or serious damage to, the employer's property or premises; or
• threat of serious environmental damage affecting the employer's property or premises.

In order to benefit from this exception, however, employers will have to demonstrate the impossibility of using any other person to protect against such threats.  

Penalties

Lastly, Bill C-58 also provides for new penalties in the event an employer resorts to the unauthorized use of replacement workers. Indeed, following the filing of a complaint, the Canada Industrial Relations Board will have the authority to order an employer to stop using the services of illegal replacement workers[6].

Bill C-58 also provides for penal sanctions against employers using replacement workers in violation of the Code. In its present form, Bill C-58 states that every employer that illegally uses replacement workers is guilty of an offence and liable to a maximum fine of $100,000 for each day during which the offence is committed or continued[7].

Administrative penalties will also be established by regulation. Such regulation, however, has yet to be released as of the date of this publication. It should be noted that penal proceedings and administrative proceedings will not have a cumulative effect with respect to the same offense[8].

Conclusion

In its current form, Bill C-58 aims to further limit the ability of federally regulated employers to use replacement workers and provides for hefty penalties in cases of non-compliance. However, given the bill is still in the early stages of adoption, future amendments are to be reasonably expected.

If you have any questions regarding Bill C-58, or require assistance understanding your rights and obligations in collective bargaining situations, please contact a member of our Employment, Labour & Equalities Group.