Bill C-39, introduced on September 21 as the Building Canada Strong Act, proposes several amendments to the Canada Labour Code (the “Code”). Most affect Part I, which governs unionized workplaces. Federally regulated employers with unionized employees should prepare for these changes.
Key measures proposed include earlier bargaining for certain collective agreements, a longer conciliation period, and new conditions for ministerial intervention in labour disputes. These changes could affect how employers and unions prepare for bargaining and how their disputes are resolved.
The measures are not yet in force and may change as the Bill moves through Parliament. If enacted as introduced, most amendments to Part I of the Code would take effect upon royal assent, subject to certain transitional provisions.
A new framework for ministerial intervention under section 107
In recent years, the federal Minister of Labour (the “Minister”) has repeatedly directed the Canada Industrial Relations Board (the “CIRB”) to end labour disputes in order to limit their impact on the Canadian economy or the public. The Minister’s authority to intervene is based on section 107 of the Code. The Minister has invoked that authority in port and rail disputes, as well as at Canada Post. In these cases, the Minister asked the CIRB to end the dispute and order employees back to work. In the port and rail cases, the Minister also directed the CIRB to impose binding arbitration on the parties. Unions have challenged several interventions at both the CIRB and the Federal Court; some cases remain pending.
Bill C-39 aims to regulate the use of section 107 by making ministerial intervention subject to certain conditions. Under the proposed amendments, once a strike or lockout is underway, the Minister can direct the CIRB to order a return to or continuation of work, extend a collective agreement, or impose a binding dispute-resolution method (e.g., arbitration) only if:
- The Minister has appointed a special mediator and reviewed that mediator’s report; and
- The Minister believes the labour dispute could harm the “national interest”.
In assessing potential adverse impacts of a dispute, the Minister can consider any relevant factor, including:
- Significant actual or potential impacts of the strike or lockout on the Canadian economy;
- Serious actual or potential social disruption caused by the strike or lockout;
- Any impact of the Minister’s direction on freedom of association.
This is the most significant change to the Code proposed in the Bill.
Earlier bargaining for certain collective agreements
Bill C-39 provides that bargaining must begin earlier when a collective agreement either has a term of five years or more; resulted from a binding dispute-resolution method, such as arbitration, imposed on the parties; or was reached after a strike or lockout.
For those three categories of agreement, the following deadlines would apply.
| Step or measure | Time until expiry of the collective agreement |
|---|---|
| Bargaining begins | Between 180 and 200 days |
| Freeze on terms and conditions of employment takes effect | 200 days |
| Reference date for the prohibition on replacement workers | 200 days |
| Deadline to enter into a maintenance of activities agreement | No later than 185 days |
Bargaining must start between 180 and 200 days before the agreement expires. This requirement triggers other changes:
- The freeze on terms and conditions of employment begins 200 days before the agreement expires, rather than when notice to bargain is given.
- The reference date for the prohibition on replacement workers is also 200 days before the agreement expires. This means an employer cannot use the services of employees or managers hired on or after that date to perform the work of unionized employees who are on strike or locked out.
- The parties must reach an agreement to maintain certain activities no later than 185 days before the collective agreement expires, rather than 15 days after notice to bargain is given.
These new requirements would apply to agreements with at least 200 days remaining on their term when the legislation comes into force.
In practice, for these three types of agreements, bargaining would begin—and the employer’s room to manoeuvre would narrow—about six months earlier.
A longer conciliation period
Before a strike or lockout can legally begin, the parties generally must go through a conciliation process overseen by the Minister. Bill C-39 extends that process: a conciliation officer, conciliation commissioner, or conciliation board would have 90 days to help the parties reach an agreement. The parties could extend this timeline further by mutual agreement. The new timeline applies only if the Minister receives the notice of dispute after the legislation comes into force.
A special mediator whose report could be made public
The Bill also creates a special mediator role. Up to the 75th day of the conciliation period, the Minister may appoint a special mediator for 21 days to help settle the dispute.
If the parties do not reach an agreement, the special mediator submits a report to the Minister. Unless they enter into a new agreement or reach a tentative agreement, the Minister must give the parties a copy of the mediator’s report and make it public five days after the mediator’s term ends. Subject to protections for personal and confidential business information, the report would identify the disputed issues, the parties’ positions, and the mediator’s recommendations.
The appointment of a special mediator would not suspend the right to strike or lockout. It could, however, lead to public disclosure of bargaining positions if negotiations reach an impasse.
Although appointing a special mediator would be optional, the Minister would need a mediator’s report before intervening under section 107. The Minister might therefore appoint one as a precaution when a major dispute is anticipated.
Transfer of union certification between airport service providers
Today, a company that wins an airport service contract is generally only required to match the compensation paid to the previous provider’s employees. As a rule, the company is not bound by the previous provider’s union certification or collective agreement.
Bill C-39 would significantly expand the obligations of incoming airport service providers. Under the proposed amendments, if a company takes over an airport service contract and provides the same or substantially similar services as the previous provider, the new provider is bound by the existing union certification and collective agreement. It also becomes a party to ongoing proceedings before the CIRB. The government could extend these rules to other industries and locations by regulation.
The Bill contains no transitional provisions for these changes, so they would apply as soon as the legislation comes into force.
Clarity on paid medical leave
Under section 239 of the Code, employees gradually accrue up to 10 days of paid medical leave per year. Bill C-39 would clarify that the Code’s paid medical leave provisions do not apply when a collective agreement provides rights and benefits that serve the same purpose and are at least as favourable. The agreement must also provide for third-party dispute resolution. This provision would take effect on a date set by order in council.
Other changes to collective bargaining and union certification
The Bill proposes several other changes, including:
- Resolving disputes over a first collective agreement: In the case of a first collective agreement, if the parties cannot reach an agreement within nine months of the notice to bargain, either party could ask the CIRB to impose a binding dispute-resolution process. The right to strike or lockout would then be suspended.
- Multi-employer certification: Multiple employers in the same region and industry, as defined by regulation, could be grouped together. This could happen at the request of two or more employers, on the Minister’s referral, or on the CIRB’s own initiative, even if no union has applied for certification.
- Mediation following certain labour disputes: The parties would have to participate in mediation within six months of signing a collective agreement reached after binding arbitration, a strike, or a lockout. The mediator would try to help the parties improve their relationship.
Key takeaways for federally regulated employers
Bill C-39 may still evolve, but the proposed changes are significant. Federally regulated employers should assess what the Bill would mean for their operations now. Those with unionized employees should immediately review their bargaining calendars. Depending on their operations and the terms of their collective agreements, employers should also review their medical leave provisions and, in the air transportation sector, their service contract practices.
We will continue to monitor the Bill’s progress and report on any changes that could affect your labour relations.