Parliament’s Federal “Anti-Scab” Bill: A Step Forward for Organized Labour
On May 27, 2024, the House of Commons passed a bill banning federally-regulated employers from using replacement workers (colloquially known as “scabs”) during lockouts or strikes. Bill C-58 received a resounding endorsement from Members of Parliament (MPs), with 316 MPs from all parties voting in favour of the legislation and none opposing it. The bill will come into effect on June 20, 2025.
This is the first legislation of its kind in federally-regulated sectors (which include, for example, telecommunications companies, banks, and air transportation companies).
As detailed below, the legislation helps to level the playing field between unions and employers, by ensuring that employers cannot undermine strike activity by simply replacing striking workers. There are gaps, however, including allowing employers to use some non-bargaining unit employees to do struck work and a “public safety” exception. Overall, this is an important step that will place greater pressure on employers to negotiate fair deals at the bargaining table.
The Legislation
By amending the Canada Labour Code, Bill C-58 prevents employers from hiring workers to replace unionized employees who are on strike or locked out. It also prohibits employers from using certain other employees or volunteers to replace striking or locked out workers, such as employees who perform management functions, employees in a “confidential capacity in matters relating to industrial relations” (i.e. human resources professionals), contractors, students and even members of the public.
Controversially, employers retain the right to have employees hired before the notice to bargain and outside of the relevant bargaining unit perform the work of employees on strike or affected by a lockout, without having to first offer this work to bargaining unit members.
The legislation also includes a “public safety” exception that could undermine the intention of the legislation if it is used too frequently or applied too broadly. Employers can hire replacement workers in “situations where there are threats to the health and safety of the public or threats of serious damage to an employer’s property”. No doubt labour arbitrators will be wrestling with the interpretation of this language in many future cases, when determining whether an employer has met the threshold for this public safety exception.
Perhaps in a bid to avoid such litigation, the Bill requires unions and employers to meet and decide how to maintain services central to the public’s health and safety early on in a bargaining process involving striking or a lockout. This may mitigate some of the concerns that would otherwise result from the public health and safety exception, where they can agree on a meaningful process to deal with such issues.
Where the threshold for the “health and safety” exception is met, employers must first offer such necessary work to bargaining unit members before hiring replacement workers.
Workers and their unions will be responsible for reporting any breach of this legislation. If an employer improperly hires replacement workers during a strike or lockout, the affected union must submit a complaint to the Canadian Industrial Relations Board (the “CIRB”). If the CIRB finds a complaint is substantiated, it can order an employer to cease the violation and issue fines of up to $100,000 per day.
Who Is Impacted
This legislation only applies to federally-regulated workers. This new law may provide momentum to secure more pro-worker laws in every Canadian jurisdiction. There is some suggestion that this momentum is indeed building. Just two months prior to Bill C-58 passing, the Manitoba New Democratic Party began efforts to have a provincial anti-scab law passed in Manitoba legislature.
While this legislation applies to federally-regulated workers, there is one very significant exemption. Bill C-58 does not apply to employees in the federal public service. This means that the federal government is permitted to hire replacement workers if their own unionized employees go on strike.
The national president of Public Service Alliance of Canada (“PSAC”)—Canada’s largest union for the federal public service—spoke at a parliamentary committee hearing and recommended that the government amend the Federal Public Sector Labour Relations Act so that public service workers could reap the benefits of anti-scab protections too. International Association of Machinists and Aerospace Workers Canada (“IAMAW”) likewise puzzled over why federal public service workers were excluded from Bill C-58’s protective cover. So far, the federal government has refused to provide its own workers with these important protections now enjoyed by other federally-regulated employees.
While this is a win for federally-regulated workers, this bill does not affect employees in provincially-regulated sectors, who constitute the majority of Canadian workers. Although Quebec and British Columbia already have anti-scab legislation of their own, most Canadian provinces do not restrict employers from using scabs during a lockout or a strike.
A Move Towards a Better Future
Despite these concerns, Bill C-58 is a positive development for workers. The bill unambiguously precludes employers from even using the services of unionized workers who personally choose to cross the picket line during a strike or a lockout—a huge win for unions, especially in the context of stressful, longstanding strikes. What’s more, prior to Bill C-58, the Code only prohibited the use of scabs if workers could prove their employers hired replacement workers to “undermin[e] a trade union’s representational capacity rather than [to pursue] legitimate bargaining objectives”. In other words, federally-regulated employers were free to use scabs as long as unions could not rebut the impression that they hired replacement workers for ordinary business goals (e.g., keeping their business going during a strike or a lockout).
In Communications. Energy and Paperworkers Union of Canada v Intek Communications Inc, the CIRB rejected one union’s argument that they were being undermined via scabs. The CIRB reasoned that turnover was so high in the employer’s industry that the scabs were probably just being used to keep business going. Intek Communications also exemplified how the old Code let employers hire scabs to increase pressure at the bargaining table with unions! Prior to these important amendments, some arbitrators refused to recognize that replacement workers are inherently threatening to unions precisely because they undermine the key pressure of a strike: the withdrawal of worker’s labour and interruption of business.
Final Impressions
While unions have generally welcomed the bill’s passage, some have identified some flaws. For example, Unifor president Lara Payne noted that the year-long delay for the bill to take effect is unfortunate. The president of Teamsters Canada also observed that the 12-month delay means the bill could be repealed by a new government before even taking effect, snatching new rights from workers’ hands before they even grasp them.
Perhaps most problematic of all, Bill C-58 does not prohibit the use of “dependent contractors” during strikes and lockouts. This hole in the anti-scab bill will surely be the subject of many arbitration disputes in the future. “Dependent contractors” are essentially a third category of worker between employees and independent contractors, and labour and employment law jurisprudence is already replete with disputes about whether a worker is an independent or dependent contractor. We can therefore expect many employers in the future to try to get around Bill C-58 by characterizing replacement workers they hired as dependent contractors.
All in all, Bill C-58 is a consequential piece of legislation that has drawn praise from key players in the labour movement, but it has also reasonably left some of those players wanting more.
Special thanks to summer student Kevin Batsinduka for his work on this post.