Defining 'essential work' too broadly in agreements could backfire and trigger arbitration, lawyer says
Effective June, 20 of this year, new amendments made to Bill C-58 will ban federally regulated employers from using replacement workers to do the work of unionized employees who are on strike or locked - out.
The bill, known informally as “anti-scab legislation,” amends the Canada Labour Code and repeals sections of the Industrial Relations Board Regulations of 2012 that had allowed limited use of replacement workers.
Seamus O'Regan, Minister of Labour and Seniors, who helped pass the bill in 2024, says it aims to give workers the ability to strike without being undermined and. encourage parties to negotiate agreements more quickly, reducing the frequency of work stoppages.
It will affect employers in federally regulated industries such as airlines, banks, telecommunications companies, and others.
For employers and HR professionals, these changes go beyond compliance, says Richard Charney, senior partner at Norton Rose Fulbright.
“Think six months, one year, two years ahead in terms of what workplace is going to need...to survive a strike,” he says.
According to Canada’s Labour Code, employers will be banned from bringing in workers after a union gives notice to bargain. That includes volunteers, students, contractors, and employees from other locations.
However, Charney says there is an exception to this rule.
Employers or managers who are not represented by a union and were employed before the notice to bargain was issued are allowed to continue providing the same services as they did before, he says.
The act also states that in specific exceptions—such as to prevent a threat to life, health, or public safety—employers are allowed to bring in replacement workers. This only applies after employers offer union members the opportunity to do the “necessary work” before bringing in outside workers.
If union members believe employers are bringing in workers illegally, the Canada Industrial Relations Board (CIRB) will investigate. If the concerns are proven true, employers will be required to pay a fine of $100,000 per day.
Charney says that in this type of situation, employers can prepare to bring in other workers to support operations during a strike — even before June 20. However, unions could still claim that act as “bad faith”.
“Even though it doesn't technically violate these provisions, it might attempt to attack the legitimate representational rights of a union, and it could be an unfair labour practice under some other section,” he explains. If people are brought in, [it has] to be in good faith to perform legitimate work.”
Having replacement workers during a prolonged strike would be “pretty rough,” Charney notes.
To prepare for the possibility of a strike, he recommends that employers instead engage in strategic planning — such as stockpiling materials or temporarily increasing staff — to reduce operational disruptions.
Employers should think ahead about what is going to be needed to survive a strike, Charney says. However, he notes that “there is only so much an employer can do,” as there are limits to this strategy—especially in industries like airlines, where it might not work.
Another provision with this new amendment is the requirement for parties to come to an agreement early in the bargaining process.
According to the Labour Code, employers and unions will be required to reach an agreement no later than 15 days after notice to bargain on “essential activities” — work that must continue during a strike or lockout to protect public health and safety.
If an agreement on the essential work is not reached, it will be referred to the CIRB, which will provide a judgment within 82 days.
Charney suggests that employers prepare well before the 15-day window begins.
“My recommendation to employers is that they consider the provisions of such an agreement and start working on them now, if they anticipate a potential strike or lockout in the next several months,” he says. “You [want to] spend those 15 days actually negotiating, instead of writing up agreements.”
If the relationship with the union is amicable, he says employers can also assess whether to engage with the group earlier.
Bill C-58's framework is designed to prevent the misuse of “essential work,” according to the government.
Charney says employers should not define any essential work too broadly in the agreements to reduce the impact of strikes. That could lead to union disputes and arbitration taking control, which takes negotiations out of the employer’s hands.
Instead, some employers should keep the agreement around essential work narrow and specific.
“It may be that you want employees to have the right to strike, because you don't anticipate that they will necessarily be successful if they try to exercise it or threaten to exercise it,” Charney explains.
The best way to deal with this is to maintain good relations with trade unions.
“Some of the things that can be done there include resolving disputes before they become prolonged grievances, showing a willingness to compromise, but also... the fortitude to draw the line,” Charney says.
HR, he says, should focus on building relationships and addressing “brewing disputes” occurring in the workplace. Even if a union representative hasn't addressed it, employers and HR should work to “circumvent those issues,” he explains.
It’s also important to make sure employers don’t react negatively to anything a union proposes in collective agreements. “It’s a matter of relationship building and also planning in advance to minimize the impact of a strike,” he adds.
Although Charney says that this new amendment is intended to support unions, he finds it more symbolic than transformative for federally regulated sectors.
According to Charney, past statistics show that bans around replacement workers can lead to significantly more strikes. In 2017, the Fraser Institute analyzed strikes in provinces such as British Columbia and Quebec, which had banned hiring temporary workers before this legislation
The report found that these provinces experienced an increase in the frequency of strikes.
“As the country pivots to improve its productivity in the face of competitive onslaughts, including tariffs from our southern neighbour, the timing of this is absolutely lousy, in my personal opinion,” he says.
Charney adds that while the legislation may appear to give unions enhanced bargaining power, that may not hold true if employers choose to withstand a strike.
The new provisions are here to stay, and Charney suggests that employers focus on compliance and long-term planning rather than panicking.
