Independent Electricity Market Operator v. CUSW, LIUNA et al

On November 23, 2009, the Ontario Labour Relations Board held that section 127.2 of the Labour Relations Act breaches the freedom of association guarantee in section 2(d) of the Canadian Charter of Rights and Freedoms.

Sections 126 and 127 of the Act allow an employer to seek a declaration from the Board that it is a “non-construction employer”. If the Board finds that an employer is a non-construction employer as defined in section 126 , the Board must, at the employer’s request under section 127.2, declare that the trade union no longer represents the employees of that employer and that any negotiated collective agreement between the non-construction employer and the trade union no longer applies to those employees.

The Independent Electricity System Operator (“IESO”) sought a declaration from the Board that it was a non-construction employer. On March 3, 2008, the Board determined that, although IESO performed work in the construction industry from time to time, it did no work in the industry for which it expected payment from another person, as set out in section 126 of the Act. Accordingly, it met the statutory preconditions for the section 127.2 declaration. However, the Board refused to declare that the trade unions who represented IESO employees no longer represented the employees of the IESO employed in the construction industry, pending a Charter challenge raised by the Canadian Union of Skilled Workers, the Labourers’ International Union of North America (“LIUNA”) Ontario Provincial District Council and LIUNA Local 1059 (collectively “the Unions”).

The Unions argued that section 127.2 was unconstitutional in that it substantially interfered with the process of collective bargaining. In its 2007 decision in B.C. Health Services, the Supreme Court of Canada recognized collective bargaining as constitutionally protected under the guarantee of freedom of association in s. 2(d) of the Charter. The Unions argued that the interference in this case was even more substantial than it had been in the Health Services case, since section 127.2 would operate to nullify every collective agreement provision already negotiated by the Unions on behalf of their members during past processes of collective bargaining, and to destroy any future process of collective bargaining by terminating the Unions’ bargaining rights with the IESO. Further, the Unions contended that this provision was not saved by section 1 of the Charter as a reasonable limit in a free and democratic society, as the IESO and Attorney General failed to identify any pressing and substantial concern which might justify such substantial interference with their collective bargaining rights.

In finding for the Unions, the Board outlined the scope of the right to freedom of association in the collective bargaining context, pointing out that the legal landscape has fundamentally changed since the challenged provisions were first enacted. The Board noted that it was not until the Health Services decision that the Supreme Court recognized that the process of collective bargaining is protected by s. 2(d), and so rejected the IESO’s contention that the issue before the Board had already been determined in the 2005 decision of the Board in Greater Essex County District School Board, [2005] OLRB Rep. March/April 281. The Board also observed that the applicant union in the Greater Essex case had claimed that the government was required to provide for its inclusion in the construction industry bargaining regime in order to permit it to collectively bargain in a meaningful way with non-construction employers, and this was an entirely different challenge than the one raised by the Unions in the instant case.

The Board went on to find that section 127.2 directly interferes with past and future collective bargaining, and found this interference to be substantial within the guidelines set out in Health Services, stating “it is difficult to imagine what could be more discouraging to the Unions’ members’ interest in coming together to pursue common goals than the challenged provisions, which both annihilate all of the gains made by their chosen representatives in respect of their workplace goals to date and strip the Unions of the right to represent and bargain with the employer in the future.”

In applying the s. 1 analysis, the Board agreed with the Unions that there was little to no evidence presented to suggest that, in enacting the challenged provisions, the Legislature was trying to address a pressing and substantial concern or a concern of sufficient importance in a free and democratic society so as to justify overriding the constitutionally protected right to freedom of association. Further, even assuming the Legislature had a pressing and substantial concern, section 127.2 did not minimally impair Charter rights, nor did its alleged salutary effect outweigh its deleterious effect.

The Board therefore declared that section 127.2 was inoperative in this case and declined to make the section 127.2 declaration.

The Unions were represented by Lorne Richmond and Simran Prihar.

Click here to read the Board's decision