The rise of Section 107

Last year saw unprecedented use of Section 107 of the Canada Labour Code to end labour disputes, raising questions about just how much unfettered power the section gives the federal minister of labour.

Labour unions are challenging the use of the provision at the Canada Industrial Relations Board (CIRB) and in Federal Court, particularly when the Board says it has no discretion but to implement the minister’s orders.

Section 107 states that the labour minister, where expedient or necessary to secure industrial peace, may refer questions to the CIRB or direct the Board to do things the Minister deems necessary. It has been part of the Code since 1984 and largely went unused until 2011 when then-labour minister Lisa Raitt used it when Air Canada flight attendants had twice voted down collective agreements.

Rather than propose back-to-work legislation, Raitt sent a reference to the CIRB, asking if anything could be done where a bargaining unit had twice voted down tentative agreements recommended by the union. She also directed the Board to “either impose a new collective agreement or impose final binding arbitration” if it concluded that the rejection of the agreements “created conditions that are unfavourable to the settlement” of the dispute. Ultimately, the parties agreed to binding arbitration, and the CIRB did not issue a ruling.

In 2024, former federal labour minister Seamus O’Regan unsuccessfully attempted to use Section 107 to pre-empt a WestJet strike. However, his successor, Steven MacKinnon, successfully used it to end a lockout and potential strike by the country’s two main railway companies, to end strikes and lockouts at Vancouver, Quebec, and Montreal ports, and to put off a weeks-long strike by Canada Post workers until May.

Chris Roberts, director of the social, economic and policy department at the Canadian Labour Congress (CLC), says that the seeds of this can be traced back to commentary on the Code’s evolution, particularly in the 1995 report of the Sims Task Force, which was mandated with reviewing the Canada Labour Code to improve the balance of labour relations between unions and employers. The report examined a range of aspects of dispute settlements in the federal context, and one of the references in that process was around inviting the government to intervene or end disputes and refer issues to binding arbitration.

“Essentially, it said that if power were given to the government to simply override the collective bargaining process and send issues to binding arbitration, that would cause the process to deteriorate. The parties in such a situation would be incentivized to not bargain in good faith and simply hold out and wait for the government to intervene,” Roberts says.

“It was interesting because both the employer and labour groups that participated in the Sims process agreed with this analysis. They thought it would be a bad idea to invite the government to play this role and for parties to rely on the government playing this role. That’s where we found ourselves in 2024.”

He says there’s evidence that in these recent disputes, the employer did not bargain seriously and constructively because they understood a work stoppage would prompt an enormous outcry for the government to step in, and that’s what they did.

While the Code does allow the government to pass back-to-work legislation, which gets the scrutiny of Parliament to determine if the mechanics are proportionate to the situation, Roberts says there is no basis for the notion that Section 107 has the extraordinary ability to be used when the government decides it’s politically convenient to end a legal strike or lock-out and send issues to binding arbitration without legislation.

Brenda Comeau, a partner at Pink Larkin in Fredericton, says there’s at least a democratic process with back-to-work legislation. That’s not the case when Section 107 is invoked.

“Interfering with the right to strike is bad enough, but now we’re doing away with the democratic process.”

Speaking personally, not for her firm, Comeau points out that a 2009 rail strike only lasted eight days without any government intervention. In contrast, the 2024 strike saw the government step in after a day and invoke Section 107 when the railways had already stopped shipments before their lockout.

“The system worked. There was no history to say these strikes tend to last six months and the economy was going suffer,” she says.

Craig Munroe, a partner with Pulver Crawford Munroe LLP in Vancouver, does employer-side labour and employment law. He says the legislature needs the ability to act and react to changing circumstances, and points to the Supreme Court of Canada’s decision in Saskatchewan Federation of Labour (SFL), which constitutionalized the right to strike and found that in cases where that was not an option, an alternative dispute resolution process needed to be in place.

“That touches on the concern raised by Rothstein and Wagner in their dissent, that the legislature is the best place to respond to those changing circumstances in a way that balances interests,” he says, adding that by invoking Section 107 during the 2024 rail strike, the labour minister was trying to respect the requirements from SFL about a meaningful alternative dispute resolution process so that a collective agreement can be reached.

Munroe notes that in two recent uses of Section 107, supply chain issues were involved.

“In this new Trump era those issues will become far more profound. Significant economic supply chain issues are now emerging as national security issues as well.”

He’s also not convinced that using Section 107 does an end-run around Parliament, as Parliament adopted the provisions in the Code.

“As far as criticisms of the actions go, that one might be a little bit of an exaggeration,” Munroe says. “The question is really if the Act provides the power that was exercised, and if not, that’s a fairly regular question to the court.”

The CLC is litigating the use of Section 107 at the CIRB and in Federal Court.

“It is alarming to see the use that the government made of this in a somewhat cavalier fashion in our view,” Roberts says, noting consultations are happening about further expanding the government’s ability to end and pre-empt the legal right to strike when it wants to send disputed issues to binding arbitration.

One of the questions before the courts concerns the level of discretion the CIRB has when deciding whether to fulfill a ministerial order to impose binding arbitration.

“The CLC’s position is that the Canada Industrial Relations Board is an independent administrative tribunal. It has the jurisdiction, authority and responsibility under the statute to independently administer the statute and ensure Charter values are respected, and the law is properly applied,” Roberts says.

“It is not an arm of government or a minion. Nor is it simply the implementer of whatever the government decides. In our view, a plain interpretation of the statute supports that.”

The CLC’s position is that the tribunal is responsible for ensuring the minister’s orders are interpreted correctly within the scope of the Act. That should be the starting point. Section 107 does not direct the CIRB to terminate a lawful strike and impose binding arbitration.

But if there is ambiguity about Section 107’s scope and intent and it can be interpreted in a way as to authorize the Board to make such direction, then it ought to be interpreted more narrowly and consistent with the purposes and scheme of the Canada Labour Code, Roberts says, which is grounded in the right to collective bargaining, the importance of freedom of association, and the Charter right to strike.

The CLC doesn’t believe the Code contemplated using Section 107 in this current form, as it is inconsistent with its purpose and intent.

Comeau says she’d be very shocked if a Court were to uphold how it’s currently being used.

“[A minister saying] ‘I’m just going to send an email and the strike will be over?’ We should hold our politicians to a higher standard than that. As much as people hate it, at least back-to-work legislation is democratic. Sending an email shows that they don’t care about your cause. These people have legitimate grievances, and it’s not easy to be in a strike position.”

But whether it’s the minister or someone with efficient decision-making authority, Munroe says someone needs to be able to determine whether it’s in the public interest to actually take the action we’ve been seeing. Whether due to national security or economic security issues, someone needs to be able to determine if an alternative resolution to supply chain disputes is required.

“Right now, with the use of Section 107, it looks like that’s the minister. The minister has accountability in how our system works, and if they exercise that authority in a way Canadians feel is unwarranted, then there is recourse for that politically,” he says.

“Maybe the current Code needs updating to reflect that current reality and to be more clear and transparent about the powers being conferred. If that’s (the case), then fair enough.”

Roberts reiterates that the current use of Section 107 will have ramifications on collective bargaining.

“The government has repeatedly said that the best deals are struck at the table. Yet, by establishing a precedent and intervening in this way, it’s signalling to parties that they can get a better deal by not reaching one at the bargaining table. Instead, they can generate economic and political pressure, forcing the minister to intervene. In our view, that is not a sufficient justification for suspending the Charter rights of Canadians.”

Comeau says there’s a growing pattern of employers locking out their workers and then crying to the government to intervene.

“The imbalance of bargaining is striking and frustrating and just not fair,” she says.

“The only message to employers now is lock the union out on day one so they can’t do a rotating strike even if they wanted to.”

While he gets the criticism, Munroe isn’t convinced.

“The reality is that both sides act in that manner,” he says, noting some union leaders have done this to satisfy their membership’s desire for significant action without having to tell them to moderate their position.

“Instead, they opt for a strike and hope the government can save them from themselves.”