The Ontario Court of Appeal ruled today, Monday, that the law of Ontario Premier Doug Ford, which imposed limits on public sector workers' wages, violates their rights to collective bargaining and is considered unconstitutional.

The law, known as Bill 124, sets public sector workers' salary increases at 1 percent annually for three years.

It was struck down by a lower court as unconstitutional, and the Court of Appeal, in its 2-1 decision, largely upheld this ruling, writing that the violation cannot be justified.

The court wrote in the majority opinion, "Due to the law, organized public sector workers, many of whom are women, racialized and/or low-income, lost the ability to negotiate for better compensation or even better working conditions that have no monetary value."

The Progressive Conservatives passed the law, known as Bill 124, in 2019 as a way to help the government eliminate the deficit, and the province said the law does not violate constitutional rights, stating that the Charter only protects the negotiation process, not the outcome.

The Court of Appeal wrote that governments have the right to try to keep compensation increases at a certain level, but the issue is how they do so; Ontario was unable to explain why wage restriction could not be achieved through good faith bargaining."

"In the absence of any evidence of utilitarian need or that the same goal cannot be achieved through collective bargaining, it is difficult to understand on what basis the beneficial effects of the law outweigh its detrimental effects."

A victory ruling for working families and workers

However, the Court of Appeal found that the trial judge erred in striking down the entire law; the law applies to unionized workers and those not represented by a bargaining organization, and the Court of Appeal said the law is unconstitutional only for workers represented by unions, who have different rights because they bargain collectively.

The law sparked widespread anger among labor groups and opposition parties, focusing particularly on its impact on the health sector, where critics say it is partly responsible for driving nurses out of the profession or to private nursing agencies, where wages are much higher for workers doing the same nursing work.

Two unions representing healthcare workers said in a joint statement on Monday that free bargaining on a collective agreement is a victory for hard-working families and all unions that fought to protect workers' rights.

Michael Hurley, President of the Ontario Hospital Unions Council of CUPE, and Charlene Stewart, President of SEIU Healthcare, said: "We urge Doug Ford to end his attacks on the people we need to fix Ontario’s failing healthcare system."

The union representing the province's public elementary teachers said the government should never have appealed the decision in the first place, because it "wasted" taxpayer money and undermined recent contract negotiations.

The Ontario Elementary Teachers’ Federation wrote: "Let the court ruling be a lesson to the Ford government not to circumvent bargaining or trample on workers' democratic rights again."

The official opposition and New Democratic Party leader Marit Stiles celebrated the court ruling as a victory for the province's workers and unions.

Stiles said: "Bill 124 hurt our province. It forced workers in healthcare and education to leave the profession, cut people's wages during the affordability crisis, and undermined people's trust in their government."

Ontario Liberal Party leader Bonnie Crombie congratulated the unions that filed the legal challenge.

Crombie said: "Today's decision is a long-awaited big win for workers who play such important roles in our lives."

Since the law was struck down, even while awaiting the appeal, arbitrators have granted retroactive pay increases for several groups of workers who have "reopening" clauses in their contracts, including teachers, nurses, other hospital workers, public employees, Ornge air ambulance paramedics, and college faculty members.

Many hospitals told a legislative committee holding pre-budget hearings that arbitration awards related to reopening Bill 124 are putting pressure on their budgets, despite the government's commitment to repay them.

Sherry Macoulo, Chair of the Kingston Health Sciences Centre Board, told the committee last month: "Bill 124 settlements push hospitals into extraordinary cash flow difficulties, threaten our financial ability, and lead to delays in important capital purchases."

Ontario's Financial Accountability Officer said in 2022 that Bill 124 was designed to save the province $9.7 billion from public sector salaries and wages, although a successful court challenge would eliminate that.

He confirmed it could cost the province $8.4 billion over five years.

Although the 2019 law was time-limited to three years, it still affects collective bargaining due to the expiration of some previous contracts and the length of some negotiations.

Ontario Provincial Police recently began negotiating a new contract, which would be subject to Bill 124 if the law is in effect. Likewise, provincial correctional officers last year received a 9.5 percent increase over three years after Bill 124 was struck down during bargaining.