On June 20, 2024, Bill C-58, An Act to amend the Canada Labour Code and the Canadian Industrial Relations Board Regulations, 2012, received royal assent. Among other things, Bill C-58 prohibits federally regulated employers from using replacement workers during a strike or lockout. As stated by the Government of Canada, the use of replacement workers distracts from the bargaining table, prolongs disputes, and harms labour relations for years afterward. Bill C-58 has far-reaching implications and marks the first significant change to the federal collective bargaining rules since the 1990s. This legislation will come into effect on June 20, 2025.

Background

Federally regulated employers were formerly permitted to use replacement workers during a strike or lockout. In 1999, the Canada Labour Code [CLC] was amended to prohibit the use of replacement workers if their use was intended to undermine a union’s representational capacity—that is, weaken the union’s ability to represent and negotiate on behalf of its members effectively. However, this was only a limited prohibition, as it required a union to demonstrate that an employer’s intention in hiring replacement workers was to undermine the union’s representational capacity. Under Bill C-58, unions will no longer be required to demonstrate this intention.

Prohibition Related to Replacement Workers

Bill C-58 removes the CLC requirement for unions to demonstrate an employer’s intention with respect to the use of replacement workers during a strike or lockout, replacing it with the following categories of persons who cannot be used as replacement workers:

• any employee or person who performs management functions or who is employed in a confidential capacity, if that employee or person is hired after the day on which notice to bargain collectively is given;
• any contractor, other than a dependent contractor, or employee of another employer;
• any employee whose normal workplace is one other than that at which the strike or lockout is taking place or who was transferred to the workplace at which the strike or lockout is taking place after the day on which notice to bargain collectively is given; and
• any volunteer, student or member of the public.

Any individuals not listed above may be used as replacement workers. For example, the prohibition does not apply to employees or persons performing management functions or employed in a confidential capacity who are hired on or before the day on which notice to bargain collectively is given. Similarly, the prohibition does not apply to workers from other workplaces who were transferred on or before the day on which notice to bargain collectively is given.

Additionally, Bill C-58 prohibits employers from using the services of employees in a bargaining unit in the event of a strike or lockout that is intended to involve the cessation of work by all employees in the bargaining unit.

Exceptions

Bill C-58 allows employers to use replacement workers under exceptional circumstances—specifically, where the services are used solely in order to deal with a situation that presents or could reasonably be expected to present an imminent or serious:

• threat to the life, health or safety of any person;
• threat of destruction of, or serious damage to, the employer’s property or premises; or
• threat of serious environmental damage affecting the employer’s property or premises.

To qualify for an exception, the use of the replacement worker’s services must be necessary to address the situation because the employer or person acting on behalf of the employer is unable to do so by any other means. Further, the employer must first provide employees in the bargaining unit who are on strike or locked out the opportunity to perform the necessary work before using the replacement worker’s services.

Penalties

Under Bill C-58, the unlawful use of replacement workers during a strike or lockout constitutes an unfair labour practice. If a union believes that an employer has unlawfully used replacement workers, it can file a complaint with the Canada Industrial Relations Board (the “CIRB”), which may order the employer to cease using replacement workers and impose a fine of up to $100,000 for each day of the violation.

Maintenance of Activities

Bill C-58 also revises the maintenance of activities process under the CLC. Previously, unions and employers had the discretion to decide whether to enter into an agreement regarding the maintenance of essential services during a strike or a lockout. Bill C-58 now requires unions and employers to reach an agreement before giving notice of a strike or lockout. Parties must finalize this agreement no later than 15 days after notice to bargain collectively has been given. If they cannot agree, they must apply to the CIRB to determine which activities need to be maintained. The CIRB is expected to resolve the matter within 82 days under an expedited process.

Key Takeaways

Bill C-58 will significantly alter how strikes and lockouts are managed in federal workplaces. With the amendments to the CLC set to take effect on June 20, 2025, federally regulated employers should begin preparing now to ensure compliance. This includes identifying which replacement workers can and cannot be used during a strike or lockout, as well as determining which workers are essential for addressing exceptional situations, such as threats to health or safety. Additionally, employers should consider how these changes might impact their overall labour relations strategy and prepare for potential challenges.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.