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Can City of Toronto Fine Private Garbage Collectors Whose Employees’ Strike

Although the media weren’t much interested in the issue during the election campaign, suddenly, now that Mayor Ford has been elected, my earlier blog posts discussing the legal difficulties the City will face when trying to contract out garbage collection are being noted.  A couple of weeks ago, editor Rob Granatstein at the Toronto Sun linked to my blog, and today a former Toronto Star city bureau reporter (Alan Christie) did the same on the news website Open File.

Comments from Doug Holyday, the new deputy mayor, in Christie’s piece are very interesting.  Here is what Holyday told Christie:

the city would force private contractors to post security bonds that they would forfeit in the event of a strike.

See, I told you it was going to be fun have Mayor Ford as Mayor.  So, here’s a question.  Can a government include in a commercial contract a clause that punishes a contractor if its’ employees exercise the legal right to strike?  I’d assume too that any such clause would have a similar punishment for a lockout of employees, since the result to the City would be same in either case.  In essence, Holyday seems to be proposing that the City would fine contractors whose employees strike or are locked out.

Note first that even if such a clause is lawful, it wouldn’t stop the contractors’ employees from striking or the contractor from locking out the employees.  It would just require the contractor to pay the city money if that happens.  It would punish the contractor if their is a lawful (or unlawful) work stoppage.

There is no doubt that it would be illegal for the contractor to make it a condition of employment that its employees not strike.  That would violate Section 70, 72, and probably 76 of the Labour Relations Act.  Probably the contractor wouldn’t be so explicit though.  More likely, the contractor would tell its employees that if they strike, the contractor will be fined by the City, and the fine could threaten the viability of the contract and possibly the contractor, and consequently the employees’ jobs.  The  contractor would probably want the employees to think that there could serious business serious implications to the employer if the employees exercise their legal right to strike.

If the contractor told them they could lose contracts if the workers unionized, would that be illegal?  Well, if it played out as I’ve described, probably so.  It would amount to the employer saying that if the employees exercise their statutory right to unionize or strike, they could lose their jobs.  Isn’t that a threat intended to compel an employee to refrain from joining a union or striking?

Is it a violation of the Labour Relations Act for an employer to agree with the City that it will pay a fine if employees strike or if locks out its employees?  That’s a good question.  Look at section 76.  Is it a coercive clause that would tend to dissuade either the contractor from locking out workers or the employees from striking?   What do you think?

Here’s another question.  Should a contract clause fining a contractor if its employees engage in a legal strike be struck down as contrary to public policy?  Courts have struck down clauses that that interfere with the administration of justice because the are contrary to sound public policy.  If the clause purported to impose a financial penalty on the contractor if it locks out its employees, for example, what we would have is a contract term that would seek to restrain the exercise of a legal right by imposition of a financial penalty.  How do you think a court would respond to such a clause imposed by a government?

I just might have to write a legal paper on this one to tell the legal world what our Mayor’s office is up to if the City were to follow through with Holyday’s suggestion.   This is so much fun already!


2 Responses to Can City of Toronto Fine Private Garbage Collectors Whose Employees’ Strike

  1. Steve Lavender Reply

    November 29, 2010 at 3:27 pm

    Right. But what about a clause that “fined” contractors if there were a work stoppage due to a legal strike or lockout. Employers may lawfully hire replacement workers in Ontario. Would a contractual clause that forced the contractor to choose between doing so or paying liquidated damages offend in the same manner as the proposals you have described?

  2. xian Reply

    November 29, 2010 at 4:47 pm

    ‘wow,’ indeed. it definitely seems like the new government is champing at the bit to test out some legal loopholes they’ve been dreaming about.

    since the issue is between the contractor and the government only, it seems it’s TECHNICALLY possible, although it heavily implies otherwise, that a contractor can refrain from any form of anti-strike-action coercion, and yet still be required to ‘compensate’ the government for any loss of service due to a strike. this scenario would be an extremely ironic inversion of the way private companies often treat governments, a la NAFTA, etc.

    but such an insurance policy, in order to at least appear legitimate, should be equally applicable to ANY loss of service, whereas holyday in his statement is explicitly targeting labour action specifically. he doesn’t at all seem shy about implying that the bonds are to act as an incentive for contractors to illegally dissuade their employees from exercising their human rights. but, it seems to me, this need not NECESSARILY be the case, and so can conceivably escape the strictures of section 76.

    it seems like one needs to look elsewhere for the answer, i.e., private/public relations law. can an employer be held legally responsible for their employees doing what they are legally entitled to do? the whole idea seems patently absurd. how is a private company in any way responsible – to the government no less – for rights granted to its workers by … that very government [albeit a different level of it]?! surely a company can opt to create a fund for itself to insure itself against loss of labour-time, but why should they pay any OTHER organizations’ insurance against an occurrence that ALL organizations are equally exposed to within a particular country?

    the whole thing is nonsense and definitely shows how UN-public-minded the new government is, having campaigned on the promise of being the MOST. it’s unspeakable cynicism to feed into the public’s greatest desire – political accountability – for no other reason than to be in a better position to violate it.

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