CCPartners | Blog

From the Bargaining Table to the Bottom Line: What Bill C-39 Means for Federally Regulated Employers

The federal government has introduced Bill C-39, the Building Canada Strong Act, which proposes significant changes to the Canada Labour Code (the “Code”). The proposed amendments would affect federally regulated employers and employees in areas including collective bargaining, first collective agreements, contractor successions, mediation and conciliation, strikes and lockouts, wage recovery, medical leave and the Wage Earner Protection Program.

For employers in federally regulated industries, the proposed changes would introduce earlier bargaining obligations, additional dispute-resolution processes and stronger enforcement mechanisms. This article highlights the changes most relevant to employers and their labour-relations planning.

Bill C-39 remains proposed legislation. The amendments discussed below should therefore be understood as proposed changes unless and until the relevant provisions receive Royal Assent and come into force. Some provisions would also require regulations or further orders before their practical effect is known.

Earlier Collective Bargaining for Certain Employers

One of the most significant proposed changes is the introduction of mandatory early bargaining for certain collective agreements.

Currently, parties can generally require collective bargaining during the four months immediately preceding the expiry of a collective agreement, unless the agreement provides for a longer period. Bill C-39 would create a separate regime where the collective agreement resulted from binding dispute resolution, a strike or lockout occurred during the previous bargaining process, or the agreement has a term of five years or more.

In those circumstances, the parties would be required to meet and commence bargaining between 200 and 180 days before the collective agreement expires. They would also be required to notify the Minister and the Canada Industrial Relations Board (“CIRB”) of the first bargaining meeting and engage with the Federal Mediation and Conciliation Service.

The timing is significant. Employers caught by this regime would need to begin preparing for bargaining considerably earlier than under the current framework.

A 200-Day Restriction on Changes to Terms and Conditions

The new 200-day bargaining period would also affect employers’ ability to make workplace changes.

Beginning 200 days before the expiry of the collective agreement, an employer subject to the new regime could not generally alter rates of pay, terms or conditions of employment, or certain employee and bargaining-agent rights and privileges until the statutory conditions permitting changes have been met, unless the bargaining agent consents.

Employers should therefore identify the applicable 200-day date well in advance and review planned compensation changes, policy changes, scheduling arrangements, benefit changes and other employment initiatives before that period begins.

New Rules for Contractor Successions

Bill C-39 would introduce successor rights where a “new contractor” takes over certain services from a “previous contractor.” The initial framework would apply to specified airport services and to services, industries and locations that may be prescribed by regulation.

Where the provisions apply, the bargaining agent representing employees of the previous contractor would generally become the bargaining agent for employees of the new contractor. The new contractor would also be bound by any collective agreement applicable to those employees at the time of succession and could become a party to pending labour proceedings.

This could be particularly important for employers involved in competitive bidding, outsourcing and contract retendering. Employers taking over federally regulated service contracts should consider collective agreements, bargaining-agent rights and outstanding labour proceedings as part of their contractual due diligence.

More Mediation Before a Strike or Lockout

Bill C-39 would extend the conciliation process and introduce a new special mediator.

The Minister could appoint a special mediator no later than the 75th day after the appointment of a conciliation officer or commissioner, or establishment of a conciliation board. The special mediator would have 21 days to assist the parties in resolving the dispute.

If the dispute remains unresolved, the mediator would provide a report to the Minister addressing the issues in dispute, the parties’ positions, their participation in the process, the prospects for settlement and the mediator’s views and recommendations.

Importantly, the report could become public. Where the parties do not reach an agreement or tentative agreement, the Minister would generally be required to provide the report to the parties and make it publicly available, subject to appropriate redactions.

For employers, this creates an additional reason to approach bargaining and mediation strategically and maintain a clear record of bargaining conduct and positions.

Additional Government Powers During a Work Stoppage

The Bill would establish additional conditions around government intervention where a strike or lockout is underway.

The Minister could direct the CIRB to order the resumption or continuation of operations, extend a collective agreement or impose a binding method of resolving the dispute where the Minister has considered the special mediator’s report and believes the work stoppage adversely affects or may adversely affect the national interest.

The proposed legislation identifies factors such as significant economic impact, serious social disruption and the effect of intervention on freedom of association as considerations that may be relevant.

First Collective Agreements: Nine Months to Binding Resolution

The proposed legislation would also change first-contract bargaining. Once a union is certified for the purpose of entering into a first collective agreement, the Federal Mediation and Conciliation Service would engage with the parties. If the parties have not reached a first collective agreement within nine months after notice to bargain, either party could apply to the CIRB for an order directing a binding method of resolving the remaining disputes.

The CIRB would generally be required to issue such an order. Once issued, the order would suspend the right to strike or lock out until the issues are resolved through the binding process or the parties reach an agreement.

For employers dealing with newly certified bargaining units, the nine-month deadline should therefore become an important consideration in bargaining strategy and planning.

Post-Bargaining Mediation

Bill C-39 would also introduce mediation after difficult bargaining. Within six months after a collective agreement is entered into, renewed or revised, the Minister would appoint a mediator where the agreement resulted from imposed binding dispute resolution or where a strike or lockout occurred during the bargaining process. The parties would then be required to meet with the mediator.

The provision reflects an effort to address the labour relationship after a difficult bargaining process rather than simply resolving the immediate economic issues.

Stronger Enforcement of Wage Settlements

Outside collective bargaining, Bill C-39 would strengthen the federal wage-recovery regime.

Where an employer and employee resolve a wage complaint through a written settlement, the employer would be required to make payment by the date specified in the settlement. If the employer fails to do so, the Head of the Labour Program could issue a settlement enforcement order requiring payment of the outstanding amounts.

After 15 days, the order could be filed in Federal Court and registered with the same force and effect as a court judgment. The Bill would also expand the circumstances in which a third party indebted to an employer could be directed to pay amounts directly to the Head of the Labour Program. In addition, certain wage orders would carry an administrative fee equal to the greater of $200 or 15% of the applicable amount.

The practical message for employers is straightforward: negotiated wage settlements will need to be treated as enforceable obligations, with appropriate processes to ensure payment is made on time.

Medical Leave and Collective Agreements

Bill C-39 would clarify the interaction between statutory paid medical leave and collectively bargained benefits.

Where a collective agreement provides medical-leave rights and benefits that serve the same purpose as the statutory entitlement, are at least as favourable, and provide for third-party dispute resolution, the collective agreement would apply exclusively to those rights and benefits.

This will be particularly relevant to unionized employers whose collective agreements already contain paid sick leave or comparable medical-leave provisions.

Wage Earner Protection Program

The Bill would also make changes to the Wage Earner Protection Program, including clarifying the definition of a “former employer” and addressing circumstances involving insolvency, receivership and changes in ownership or legal form.

These amendments may be relevant to employers, directors and purchasers involved in restructuring, insolvency or distressed-business transactions and should be considered as part of the broader employment implications of such transactions.

Looking Ahead

Bill C-39 would represent another significant development in federal labour relations. The proposed amendments would move certain bargaining processes earlier, introduce additional mediation and dispute-resolution mechanisms, expand the CIRB’s role and strengthen enforcement tools.

For employers, the practical takeaway is that labour-relations planning may need to begin earlier and that procedural compliance will become increasingly important. Employers in federally regulated industries should monitor the Bill’s progress, the development of related regulations and the eventual coming-into-force dates, while assessing how the proposed changes could affect their collective agreements, bargaining strategies, contracting arrangements and wage-compliance practices.

Contact one of the lawyers at CCPartners to further discuss the above.

Click HERE to access CCPartners’ “Lawyers for Employers” podcasts on important workplace issues and developments in labour and employment law.