Labour Relations Code amendments—Why are BC Fed officials smiling?
On April 30th 2019 the NDP government introduced Bill 30, the Labour Relations Code Amendment Act that fundamentally alters the law in favour of unions Bill 30 – Labour Code. The Act largely follows the recommendations of the Labour Relations Code Review Panel (the “Review Panel”) in its August 31st 2018 Report (the “Report”)see: Report of Review Panel.
While employers may be thankful that Andrew Weaver stuck to his guns and forced the NDP to retain the secret ballot vote in certification applications, the reality is that employers, especially nonunion employers, need to take note of these changes as they may well have a profound impact on how business is done in BC. Further the Report makes it clear that there may well be other changes following further consultations.
Bill 30 comes on the heels of proposed amendments to two other pieces of employment legislation, namely:
- significant “worker favourable” changes to the Workers Compensation Act that have been introduced or will likely be introduced following further consultations; and
- significant changes to the Employment Standards Act that were introduced on April 29th 2019 in Bill 8. We will be posting a summary of Bill 8 on our blog website in the week of May 13th,
Nonunion employers in particular should become familiar with the certification process and the potential impact of the changes on your particular business once Bill 30 becomes law in order to develop effective strategies to respond to a union organizing drive.
Bill 30 is aimed at increasing union power and union density. BC Fed President Laird Cronk summed it up nicely:
“British Columbia remains a low-wage province, and precarious work is on the rise. The best antidote to economic inequality is greater union density.”
Furthermore, the changes proposed in Bill 30 create uncertainty for employers and will undoubtedly increase litigation as the Labour Relations Board (the “LRB”) sorts out what the changes mean and how they are to be applied. Further consultations recommended by the Review Panel will likely produce more legislation down the road (for example, in the forest industry). One thing remains certain—the changes in Bill 30 are, for the most part, intended to increase union density and security and will likely be interpreted by the LRB with that in mind. The LRB will likely rely on the Report as well as Hansard debates in interpreting the new provisions as well as the old (e.g. sections 6(1) and 8) of the Code.
Here then is a brief summary of the provisions. As noted, this summary is prepared based on the legislation tabled in First Reading. The reader will have to consider any changes between now and the time Bill 30 is proclaimed into law.
DEFINITION OF BUSINESS DAY SECTION 1(1)(a)
Section 1 of Bill 30 adds a new definition, namely, “business day”. That term is defined as a day other than Saturday, Sunday or another holiday. This amendment is made to define the 5 business days notice now required between the application for certification (or decertification) and the secret ballot vote (see sections 24 and 33 discussed below).
DEFINITION OF PICKETING SECTION 1(1) (b)
In 1999, the Supreme Court of Canada struck down the definition of “picketing” under the Code because the definition encompassed consumer leafletting. The SCC held that consumer leafletting was freedom of expression protected by the Charter. Section 1 of Bill 30 excludes from the definition of “picketing”, consumer leafletting that does not unduly restrict access or egress or prevent employees from working at their place of employment. Hopefully this will be seen as a housekeeping measure and not a call to increased consumer picketing.
CONTINUING REVIEW OF THE CODE SECTIONS 3(3)-(6)
Every 5 years the Minister must appoint a committee of special advisors to undertake a review of the Code and make recommendations. See section 2 of Bill 30.
EMPLOYER FREE SPEECH SECTIONS 6(1), 8 and 123.
In 2002, the Liberal government made two fundamental changes to the Code that had been amended by the NDP in 1992. The 1992 NDP amendments introduced sweeping changes in favour of unions and, not surprisingly, union density increased. The 2002 Liberal amendments restored some of the balance lost in 1992 by (a) reinstating the secret ballot vote in union certifications; and (b) expanding and widening employer free speech.
Bill 30 returns to the restrictive practices of the 1992 Code by reversing the 2002 Liberal amendments to sections 6(1) and 8. We will have to go back and look at the LRB’s jurisprudence from 1992 to 2002 to consider how restrictive these changes might be and how the current LRB might interpret those changes. It is difficult to reconcile the Review Panel’s desire to modernize the Code in a changing world through “déjà vu all over again” amendments like these.
Recognizing the return to restrictive employer freedom of speech, the Review Panel noted in its Report that the LRB was better equipped to provide “objective neutral information that best assists the exercise of employee choice”. The Review Panel recommended detailed provisions on how that information should be provided. Bill 30 does not follow the specific recommendations but rather amends section 123.1 of the Code to require the LRB to make available to the public information about rights and obligations under the Code. It also gives the LRB the power to direct employers to make available to employees “information about rights and obligations under this Code” as “provided or approved by the board.”
REMEDIAL CERTIFICATION WITHOUT A VOTE SECTION 14 (4.1)
The Code provides the LRB with a very broad remedial authority including requiring an employer to reinstate an employee; ordering a second vote; and requiring an employer to post its decisions at the employer’s place of business. The LRB has always had the power in the face of egregious unfair labour practices to order a certification without a vote. The current language of the Code gives the LRB the power to order remedial certification if it were likely that the union would have obtained the majority support of the employees “but for” the egregious unfair labour practices. That “but for” restriction is removed by section 5 of Bill 30 and replaced with: “the [LRB] believes it is just and equitable in order to remedy the consequences of the prohibited act”. At this stage no one knows exactly how the LRB will exercise its very broad discretion under this amendment.
This is a major change in my view that, coupled with changes to employer free speech, might well see a significant increase of remedial certifications issued by the LRB. The Review Panel’s comment, at p. 10 of the Report, that “In our view, remedial certification is the most effective deterrent and remedy for unfair labour practices” suggests this result.
The impact of this change will be felt in other areas of the Code, such as the imposition of a first time collective agreement under section 55 of the Code. Now the LRB will be able to take the conduct of the employer, before and after certification, into account in exercising its discretion.
RAIDS SECTIONS 19 AND 27.1
Under the current provisions of the Code, if an employer is certified to and has a collective agreement with Union A, Union B can apply to take over that certification and collective agreement and step into the shoes of Union A. Such applications must be made during the 7th and 8th months in each year of the collective agreement.
Bill 30 makes two key changes.
First, section 6 of Bill 30 replaces section 19 of the Code. Under that new section 19, the new “raiding rules” are:
(a) if the collective agreement is for a term of 3 years or less, then the raid can only take place in the 7th and 8th month of the last year of the agreement;
(b) If the collective agreement is for a term of more than 3 years, the raid can take place in the 7th or 8th months of the third year and thereafter in each subsequent year of the agreement; and
(c) a raid can take place in both (a) and (b) above, in the 7th or 8th month of any subsequent year of the collective agreement and/or a continuation of the collective agreement.
Special conditions apply where “a majority of employees [are] primarily engaged in construction work” in which case a raid may take place each July or August of each year of the collective agreement. “Construction” was defined by the Review Panel in the Report, but Bill 30 does not define “construction work”.
Second, section 8 of Bill 30 adds a new section 27.1 to the Code. It provides that, if a union is successful in raiding a bargaining unit, it may apply to the LRB to have the collective agreement declared “expired”. If it is successful in its application to the LRB, the union is not bound by the collective agreement of the incumbent union and can require collective bargaining to begin. Bill 30 does not set out the criteria to be considered in making such decisions, but the LRB might well look to the Review Panel’s Report for guidance. The Review Panel recognized that reopening collective agreements could have serious consequences and suggested, at p. 18 of the Report, that the exercise of this discretion should only be used “in extra-ordinary circumstances having regard to [the successor union’s] Section 2 duties”. Many employers rely on the certainty of a collective agreement in organizing their long-term business objectives and, in many cases, long term agreements reflect the employees’ recognition it is in their interests to do so. However, the one example the Review Panel gives is scary. The Review Panel, at p. 18, suggested one example of where the collective agreement could be voided would be where the “terms of the collective agreement are clearly inferior to the norm in the sector.”
TIME LIMITS ON APPLICATIONS FOR CERTIFICATION SECTION 24 AND DECERTIFICATION SECTION 33
Under the current Code, when a union applies for certification, the LRB must order a vote of employees in the bargaining unit within “10 days”. During that time, the LRB will direct a special officer to review payroll records and prepare a report to decide, for example, if the union has the threshold 45% of employees signed up to proceed with its application and to identify any issues that might arise (e.g., inclusions/exclusions, appropriateness of the bargaining unit etc).
The special officer will also schedule a tentative vote within the 10-day period. The LRB will schedule an immediate hearing to consider if the union has the threshold support, confirm the vote and timing and hear any objections that might arise.
Consequently, there is very little time, even under the current system, for a non-union employer to seek legal or other advice on the process; obtain the data required; understand its rights and obligations; and implement a communication strategy that is both effective and in accordance with the restrictions of the Code. That communication statement must be in accordance with the changes and restrictions on employer free speech in the amended sections 6(1) and 8 of the Code (See: “EMPLOYER FREE SPEECH SECTIONS 6(1), 8 AND 123.1” above). That will require more risk management assessment.
Section 9 of Bill 30 amends the timeframe to require a vote within “5 business days” (see new definition above) instead of the existing 10 days. It also provides for mail ballots in exceptional circumstances. Bill 30 also amends the time limits for a secret ballot vote in a decertification application to 5 business days.
This time period between the application for certification and the secret ballot vote can be very critical. For example, a union may file its application just before 4 pm on a Monday and the employer may not become aware of it until sometime the following day. The vote would be held on the Friday at the latest. As well the union has control of the timing when the application will be made. That means it can file its application for example at a time when it knows senior management may be away and unable to respond to the application. As well, the Review Panel recommended that Regulation 3 of the Code be amended to expand the time union membership cards are valid for use in a certification application from 90 days to 6 months. This Regulation has not yet been amended, but likely will be once Bill 30 becomes law.
This is why we recommend that nonunion employers learn more about the certification process and the issues well in advance of any organizing drive or application for certification. We hope that you never need to use this information, but your motto should be “BE PREPARED”. Let’s hope you never need to mobilize your strategy in a short time period but, having done your preparation, you will at least be in a better position to implement an effective strategy.
Note also that the decertification provisions have extended the time another union can apply to certify a unit that was decertified from “10 months” to “12 months”.
SECTION 35 SUCCESSORSHIP WHEN SERVICE CONTRACTS ARE RETENDERED SECTION 3
Section 35 of the Code provides that if a business or part of a business is sold, leased, transferred or otherwise disposed of, the successor employer will assume the obligations of the vendor including a certification and collective agreement.
However, it has long been recognized by the LRB, that the successorship provisions do not apply to contracting out or re-tendering of contracts. This approach is consistent with the fundamental premise of the Code that certifications do not attach to the work but to the business and the employees.
Bill 30 makes very significant changes to successorship rights where there is contracting out or re-tendering of a service contract.
Section 10 of Bill 30 amends section 35 of the Code by adding a new definition of the term “contract for services” as meaning any contract for:
- Building cleaning services
- Security services
- Bus transportation services
- Food services
- Non-clinical services provided in the health sector (including a lengthy definition of non-clinical services)
- And any other services the NDP prescribes
It is noteworthy that these definitions go well beyond the suggested definitions in the Review Panel’s Report that limited food services to those in the health sector (see p. 12 of the Report). And without any restrictions on what other services might be caught down the road employers cannot have the certainty such legislation requires.
The new section 35 of the Code goes on to provide that if contracts for services are “retendered and substantially similar services continue to be performed, in whole or in part, under the direction of another contractor”, the contractor is bound by all proceedings under the Code prior to the date of the contract and the collective agreement continues to bind the successor contractor. The problem with this amendment is that, in the ordinary successorship, there is a business relationship between the vendor and purchaser—under these amended provisions there will likely be no contact with the contractor who lost the contract. As a result, the successor employer will be bound by the predecessor’s collective agreement and other proceedings under the Code, but will not have access to the normal business documents and records regarding the employees and the union.
In order to avoid any opportunity for an owner of a business or a contractor to address these situations, this amendment is made retroactive and is effective the date of the First Reading.
This will likely be one of the most problematic amendments of Bill 30. The definition of services is unclear and there is no way of knowing what other services will be included by Regulation. Will landscaping be added? What if the successor contractor has a collective agreement that covers employees in a number of locations? What if a business has contracted for certain services and it is found the contract is totally unsustainable? The new contractor must negotiate a contract with the owner of the business but is bound by a collective agreement that may be too rich and not reflect the business realities.
Why should a small group of unionized employees be able to get a lifetime job security attached to the work whereas the vast majority of employees do not enjoy that type of job security? To raise the questions is to answer them—these amendments have not been well thought out and the cost implications could be huge.
Ironically unionized service contractors will now find it much hard to get contracts for fear of the successorship provisions.
The problem with the amendments to section 35 of the Code is that they ignore today’s business reality. Many employers, large and small, make a solid business decision to contract out non-core parts of their business. This promotes efficiency and supports the success of the business for the owners as well as the employees of the main business. Why should that fundamentally sound business model be interfered with in this way?
STATUTORY FREEZE AND REQUIREMENT OF PROPER CAUSE SECTION 45
Under the current section 45 of the Code, if a union is certified, there is a statutory freeze on wages and other terms and conditions of employment for 4 months. In section 11 of Bill 30, that time period has been increased to 12 months. Under the current section 45(4) of the Code, an employer can only terminate an employee for “proper cause” during this extended period.
Further, if an application to impose a first collective agreement is made during the 12 month “freeze”, and that process has not concluded, the freeze will continue until the conclusion of the process related to the imposition of the first collective agreement.
FILING A COLLECTIVE AGREEMENT WITHIN 30 DAYS AFTER EXECUTION SECTION 51
This provision has historically been honoured more in the breach than in compliance. In order to encourage the parties to file the agreements, section 12 of Bill 30 adds a new subsection to section 51 that provides that if the collective agreement is not filed the [LRB] may decline to consider the collective agreement in any proceeding before the [LRB].”
Not sure how effective this “hammer” will be.
JOINT CONSULTATION COMMITTEES SECTION 53(5)
In an effort to improve the collective bargaining relationship, section 53(5) of the current Code provides that the LRB “must on the joint request of the parties appoint a facilitator to assist in developing a more cooperative relationship between the parties.” Bill 30 provides that such a request can now be made by either party.
ADJUSTMENT PLANS SECTION 54 (2.1) – (2.5)
Section 54 of the current Code provides that if the employer plans on introducing major changes affecting the employment of a significant number of employees, it must give at least 60 days’ notice and must meet with the union, in good faith and endeavour to develop an adjustment plan. Section 14 of Bill 30 amends section 54 to provide that, if the parties haven’t agreed to an adjustment plan, either party may apply for mediation. While the mediator may make recommendations, he/she cannot impose an agreement.
FIRST TIME COLLECTIVE AGREEMENTS SECTION 55
As noted above (see: “REMEDIAL CERTIFICATION WITHOUT A VOTE SECTION 14 (4.1)), under Section 55, the associate chair can, following mediation, set a process for concluding a collective agreement that may include arbitration or allowing the parties to strike or lockout. Before that application can be made, however, the current provision requires that the employees have voted to go on strike. This requirement has been removed (see section 16 of Bill 30). Without a strike vote, unions can now try to obtain an arbitrated first collective agreement without having confirmed the employees support the union’s position.
Under these amendments, if the certification is a remedial certification following an unfair labour practice, the mediator, in making recommendations, and the associate chair, in deciding whether to impose arbitration, can each look at conduct of the parties both before and after certification.
My sense is this will end up with more arbitrated first-time collective agreements where the employees do not have the desire to strike.
ESSENTIAL SERVICES SECTION 72
Education will no longer be an essential service. What is interesting is that the Review Panel noted at p. 28 of the Report that “Education services that may be truly essential (such as grade 12 examinations) would continue to be captured by the Board’s interpretation of the term “welfare”. See section 16 of Bill 30.
INDUSTRY COUNCILS SECTION 80
These amendments will allow the Minister to establish Industry Councils with specific mandates. See section 17 of Bill 30.
SETTLEMENT OFFICERS SECTION 87(1)
Currently a settlement officer can only be appointed after 45 days of the completion of the grievance procedure. That time limitation has been removed. See section 18 of Bill 30.
CASE MANAGEMENT CONFERENCES SECTION 88.1
In order to move arbitrations forward, this amendment provides that, within 30 days of the appointment of an arbitration board, the arbitration board must conduct a case management conference to exchange information and documents, schedule hearing dates and encourage settlement of the dispute. See section 19 of Bill 30.
APPEAL TO THE COURT OF APPEAL SECTION 100
Over the years there have been a number of cases where one party wants to appeal an arbitration award. Generally, that application would be made to the LRB under section 99 of the Code. But the Code provided, in section 100, that certain reviews had to go directly to the Court of Appeal. The line of demarcation was not clear. Section 20 of Bill 30 attempts to limit the jurisdiction of the Court of Appeal to matters of “general law” that are not included in section 99 and are “unrelated to a collective agreement, labour relations or related determinations of fact”. While helpful in narrowing the court’s jurisdiction, there will certainly be a period of litigation as the court sorts out what specific jurisdiction it retains.
EXPEDITED ARBITRATION SECTION 104
Section 21 of Bill 30 attempts to streamline the process for expedited arbitration by, among other things, eliminating and replacing existing time limits and providing for oral decisions followed by a written decision not exceeding 7 pages within 30 days. This brings to mind the difficulty arbitrators may have in sticking to the limited number of pages: “I was going to write you a short letter but I did not have time…”
LIST OF EMPLOYEES SECTION 140
Section 23 of Bill 30 amends section 40 of the Code to allow the LRB to order an employer to provide a list of employees in the proposed bargaining unit within the time specified by the LRB. It is not clear what the LRB will do with the list. The Review Panel did not propose production of employee lists to a union prior to an application for certification but this amendment is not specifically clear enough to describe how such a list will be used.
FINES SECTION 158
In order to enhance enforcement of LRB orders, the fines for individuals will go from $1,000 to $5,000 and for corporations or trade unions from $10,000 to $50,000. See section 25 of Bill 30.
Bill 30 is a major piece of labour reform brought about by the NDP’s commitment to expand union bargaining rights. It is consistent with other initiatives of the NDP such as the all Building Trades Project Agreements for major construction in B.C. (e.g., the Pattullo Bridge). There may be debate in how far the pendulum has swung but there is no doubt we are once again in a pendulum mode of creating labour legislation in B.C.
We strongly encourage employers to consider their options at this time in order to prepare for any union organizing drive that might come your way or the impact of the other provisions of Bill 30 on your business.
If you have any questions regarding the above please do not hesitate to give me a call or drop me an email at email@example.com
The content in the Michael Weiler Employment + Labour newsletters and blog is for your general information and should not be taken as legal advice. Further, this review is simply a summary of some of the key items of Bill 30 as it stands at First Reading. There will very likely be changes before Bill 30 becomes law. If you have a specific problem, please contact Michael Weiler to discuss your situation.