Skip the Scabs: Federal Government to Ban Use of Replacement Workers During Strikes and Lockouts

Strikes and lockouts cause massive interruptions in an employer’s operations. When faced with a strike or lockout, employers will sometimes use replacement workers to continue their operations and ease the financial consequences. Replacement workers, colloquially known as “scabs”, are people who are hired or used to temporarily perform the bargaining unit work of the unionized employees who are absent while on strike or lockout. Replacement workers help minimize the operational and economic impacts of a strike or lockout, and can reduce its overall effectiveness – sometimes with significant union pushback.[1]

Replacement workers are a very common tool used in Canada. From 2012 to 2023, replacement workers were used in nearly half (42%) of all strikes or lockouts in federally regulated workplaces.[2]

However, the federal government has recently tabled legislation that, if passed, would ban replacement workers in federally regulated workplaces during a strike or lockout. Bill C-58, titled An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, 2012, is poised to prohibit federally regulated workplaces from hiring replacement workers during a strike or lockout, with certain exceptions.[3]

What is the current rule?

Currently, federally regulated workplaces are allowed to use replacement workers as long as their intent is not to undermine the union’s representational capacity.[4] Otherwise, it is free rein.

What will be banned?

If passed, Bill C-58 will ban the use of replacement workers in federally regulated workplaces. This means that, during a legal strike or lockout, the following people cannot perform bargaining unit work while those unionized employees are striking or locked out:

1. Any employee or person who is hired after the day on which notice to bargain is given if that employee (a) performs management functions or (b) is employed in a confidential capacity in relation to industrial relations;
2. Any employee of another employer; or
3. Any contractor, other than dependent ones.

Employers will still have the right to use their existing workforce (i.e. employees who are not on strike and who were hired before the date the notice to bargain was given) to perform the bargaining unit work of striking or locked out employees.

Are there exceptions?

There are two categories of exceptions.

First, certain contractors are not covered by the proposed ban:

1. The ban does not apply to dependent contractors.
2. The ban also does not apply to contractors who continue to provide the same services they did before notice to bargain was given. During a strike or lockout, employers will be able to continue using the services of a contractor—even if those services are the same, or substantially similar, to the bargaining unit work of the striking or locked out employees—as long as the services are provided in the same manner, to the same extent and in the same circumstances as they were before notice to bargain was given.

Second, the ban allows employers to use replacement workers to perform bargaining unit work if it is necessary to deal with a situation that presents, or could reasonably be expected to present, an imminent or serious:

1. Threat to the life, health or safety of any person;
2. Threat of destruction of, or serious damage to, the employer’s property or premises; or
3. Threat of serious environmental damage affecting the employer’s property or premises.

This exception cannot be used by employers to continue the supply of services, operation of facilities or production of goods if there is no imminent or serious threat.

To whom does the ban apply?

If passed, the ban will apply to all federally regulated workplaces such as those engaged in areas of banking, telecommunications, postal services, interprovincial trucking, port services, marine shipping, and radio and television broadcasting. It also includes First Nations band councils, certain activities of Indigenous self-governments, the federal public service, federally regulated Crown Corporations, and all public and private companies and municipalities in the Territories.

What else does it do?

Bill C-58 will also encourage employers and unions to reach an agreement on the activities which must be maintained during a strike or lockout. Agreeing to this list of activities will expedite the adjudication of an unfair labour practice complaint that an employer is improperly using replacement workers.

What are the consequences of breaching the ban?

The improper use of replacement workers will be subject to an unfair labour practice complaint. These complaints can result in a fine of up to $100,000 per day for each day that the improper use of replacement workers is committed or continues.

Bill C-58 also allows the federal government to pass regulations that impose additional monetary penalties.

When will the ban start?

If the legislation is passed, the ban would come into effect eighteen (18) months after the day it receives royal assent.

Takeaways

Bill C-58 will drastically shift the power balance between federally regulated employers and their employees during a legal strike or lockout. Once the ban comes into effect, federally regulated employers should obtain legal advice before hiring or using any replacement workers to ensure it is in compliance with federal law.

[1] See eg Fullowka v Pinkerton’s of Canada Ltd, 2010 SCC 5.

[2] See Employment and Social Development Canada, “What we heard: Prohibiting replacement workers in federally regulated industries and improving the maintenance of activities process under the Canada Labour Code” (His Majesty the King in Right of Canada: September 2023) at 1.

[3] See Bill C-58, An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, 2012, 44^th Parliament, 1^st Session, Canada (November 9, 2023).

[4] See Canada Labour Code, RSC 1985, c L-2 at s 94(2.1).