Federal Minister of Labour intervention in labour disputes: Analysis of the CN case and CIRB limitations

On October 22, 2024, the Canada Industrial Relations Board (CIRB) published written reasons for a decision delivered verbally on August 24, 2024. In the decision involving Canadian National Railway Company and Teamsters Canada Rail Conference; Canadian Pacific Kansas City Railway and Teamsters Canada Rail Conference,¹ the CIRB found it did not have the authority to review or question the legitimacy of the ministerial directions issued under section 107 of the Canada Labour Code (CLC), since this responsibility lay exclusively with the Federal Court. A judicial review of the directions has been filed with the Federal Court. The outcome of this proceeding is still pending.

Facts

This decision comes after negotiations for renewing collective agreements between the Canadian National Railway (CN), the Canadian Pacific Kansas City Limited (CPKC) and the Teamster Canada Rail Conference (union). 

At the beginning of August 2024, CN asked Steven MacKinnon, Federal Minister of Labour, to use his power under section 107 of the CLC to require the CIRB to impose arbitration, a request the minister refused. As a result, both CN and CPKC announced a lockout starting on August 22 in their respective units, while the union announced the beginning of a strike at CPKC on the same date. As the situation escalated, Minister MacKinnon issued directions to the CIRB under section 107 of the CLC, to require CN and CPKC to resume operations and the employees to resume their duties, imposing final interest arbitration to resolve disputes and extending existing collective agreements.

The union challenged the ministerial directions, asking the CIRB to declare them illegal and refrain from implementing them. In fact, it claimed that section 107 of the CLC did not authorize such directions and maintained they were contrary to the Canadian Charter of Rights and Freedoms (Charter), since they restricted the exercise of the right to strike, which is protected by the Charter.

Decision

Drawing on a recent Supreme Court of Canada decision,² the CIRB concluded it had no authority to challenge the validity of the ministerial directions. Challenges to these directives, which are discretionary decisions of the minister based on explicit legislative authority, fall exclusively within the jurisdiction of the Federal Court. As a result, the CIRB applied Minister MacKinnon's directions, finding that it had no discretion to refuse to implement them, even though the issue raised important labour law and collective bargaining issues. The CIRB also made it clear it could not question the minister's directions on the grounds they were contrary to the Charter, as this issue would have to be referred to the Federal Court. The union has also taken its challenges to the Federal Court.

Recent case law

In the summer of 2023, a labour dispute began between Canada’s International Longshore and Warehouse Union (ILWU) and the BC Maritime Employers Association (BCMEA), prompting the then federal Minister of Labour, Seamus O'Regan, to intervene. The minister then appointed a mediator under section 105 of the CLC, who proposed an agreement that the parties accepted and undertook to recommend. 

However, the ILWU voted against the agreement. Consequently, Minister O'Regan used section 107 of the CLC to ask the CIRB to determine whether the refusal of the mediator's proposed agreement made it impossible to settle the dispute through negotiation, and if so, to impose either a new collective agreement or binding arbitration. Ultimately, the parties agreed on the terms of a new collective agreement, which was ratified by the members. Although this port strike lasted only 14 days, it paralyzed freight transport nationwide, causing billions of dollars in financial losses.  

More recently, in July 2024, Minister O'Regan exercised his discretionary power under section 107 of the CLC to impose binding arbitration in the labour dispute between WestJet and its mechanics. A strike would have greatly disrupted the flights of hundreds of thousands of travellers and caused considerable damage to Canadians. Through his ministerial direction, the minister imposed final arbitration on the parties. Unlike what happened in the CN/CPKC case, he remained silent on the question of a possible suspension of the right to strike. The CIRB determined that the minister's direction did not suspend the strike or require the mechanics to return to work.

Most recently, in September 2024, the labour dispute between Air Canada and its pilots was closely monitored by the new Minister of Labour, Steven MacKinnon. The Minister refused to interfere in the dispute, leaving the parties to find a solution without government involvement. The parties finally reached an agreement in principle in mid-September, averting a work stoppage and flight freeze for Canada's largest airline.³

On November 4, 2024, the BCMEA initiated a lockout at the ports of British Columbia in response to a partial strike by the ILWU. A few days later, on November 10, the Maritime Employers Association (MEA) initiated a lockout following the rejection of the MEA's comprehensive and final offer by 99.7% of the longshoremen at the Port of Montreal.⁴

Faced with these labour disputes paralyzing two of Canada's largest ports, on November 12, the Minister exercised its power under section 107 of the CLC for the second time in three months, imposing final arbitration on the ports of Montreal and British Columbia, as well as on the port of Québec, which had been locked out since September 15, 2022. In one fell swoop, Minister MacKinnon ended three labour disputes at Canadian ports, putting an end to disruptions costing millions of dollars every day operations were suspended.

At the time of writing, a new labour dispute between the Canadian Union of Postal Workers and Canada Post is also drawing attention near the holiday season.

Takeaways

It is important to remember that in 2015⁵, the Supreme Court of Canada recognized the right to strike as an essential constitutional component of the collective bargaining process protected by freedom of association, which may complicate the federal government's adoption of back-to-work legislation, a process it has resorted to on several occasions in the past.  

However, it appears that the federal government, through section 107 of the CLC, may have alternative solutions to the adoption of back-to-work legislation. Section 107 may prove to be a powerful tool for the federal Minister of Labour and, incidentally, for the parties, in the event of labour disputes in enterprises under federal jurisdiction.

In addition to section 107 of the CLC, the minister also has the powers vested in him by sections 105 and 106, which allow him to appoint a mediator to make recommendations for settling the dispute between the parties, and to conduct inquiries into matters likely to affect labour relations. For their part, provincial governments have varying intervention powers under provincial labour legislation, though these vary across the country. The outcome of the ongoing litigation concerning CN/CPKC may impact the degree to which provincial governments are willing to adopt an interventionist approach to labour disputes.

The cases concerning CN/CPKC and the ports may herald a trend towards increased federal government intervention in labour disputes under its jurisdiction. It will certainly be interesting to see what the Federal Court concludes in the CN/CPKC case, and whether or not this decision will limit the Minister's powers of intervention under the Canada Labour Code. 

We will be following this matter closely. Keep an eye out for our next legal update on this topic.

Norton Rose Fulbright (Richard Charney, Jean-Simon Schoenholz, Samantha Cass et Samuel Keen) is representing CN in this matter.