Did the Liberals Violate the Labour Relations Act By Giving Money to Teachers Unions?

November 18, 2015

Last month, the Globe and Mail reported that the Liberals had agreed to pay three teachers’ unions money amounting in total to more than $3 million to cover extra bargaining costs associated with the new collective bargaining regime introduced by the Liberals about a decade ago.  The

story launched an extended media blitz condemning the payments as “secret payouts” to win the union’s cooperation or worse, their political support in elections.  Later, news broke that the government had also paid over $4.5 million to the employer school boards, more than the payout to the unions, ostensibly for the same reason, to cover bargaining costs.
Certainly, the payments have imposed a political cost on the Liberals.  I will leave the question of whether it was a good political or public policy idea to pay unions and school boards millions of dollars to offset bargaining costs to political pundits, politicians, and columnists.  Certainly, the Liberals have been bashed for the payments and the way in which they originally explained them.  What interests me is the recent suggestion by some that the payments actually violated the Ontario Labour Relations Act.  Are the payments actually ‘illegal’?
The allegation is that the payment by the government to the unions violates Section 70 of the LRA.  Here is the text of that section (with my emphasis added):

70. No employer or employers’ organization and no person acting on behalf of an employer or an employers’ organization shall participate in or interfere with the formation, selection or administration of a trade union or the representation of employees by a trade union or contribute financial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of the employer’s freedom to express views so long as the employer does not use coercion, intimidation, threats, promises or undue influence.

Does this section prohibit a provincial government from providing funds to a union to offset additional expenses caused by a new legislative collective bargaining scheme that everyone (including the school boards) agrees imposes news costs on the parties involved in the bargaining?
That’s a fun topic for a labour law course.  Let’s walk through it.
The first thing to note is that the Section 70 prohibition on ’employers’  giving money and “other support” to unions was enacted for a specific policy reason:  to stop employers from facilitating the creation of ‘company unions’.  Company unions are unions or associations that are not independent of the employer.  In the past, some employers would give money away to anti-union employees and encourage them to start an “association” as a way to keep ‘real unions’ out.  This section is intended to prevent that practice.   There is no doubt that the teachers unions in Ontario are real unions, independent of the Liberal Party and the school boards.  Therefore, we should all be able to agree that the sort of payment made by the Liberals to the teachers unions is not the scenario that Section 70 was designed to deal with.
That doesn’t mean it still can’t be stretched to fit that scenario, just that the ‘mischief’ (as we lawyers say) that the Section was designed to address is not at play here.   There are cases in which employers have provided unions with employee lists and access to the workplace to facilitate union organizing, “other support” with the meaning of Section 70, and yet the OLRB has found that did not violate Section 70, provided the union involved is arms-length and independent from the employer.  The OLRB takes a purposive approach to the employer support portion of Section 70.
Secondly, there is a real question whether the Section even applies here.  Is the Liberal Government “the employer” of teachers?  I admit that I am not an expert on teacher collective bargaining so if someone has other insights into this, by all means, pass them along.  But my understanding is that teachers are employed by school boards (see Section 2(4) of the School Boards Collective Bargaining Act, and the excellent comment of David below, who refers to the 2012 OLRB decision in R v Ontario Secondary School Teachers’ Federation beginning at para. 62, where the Board finds that the Crown is not an employer for the purposes of Section 70).   The Memorandum of Agreement in which the payments appear defines “the parties” as the Ontario Public School Boards Association and the union.  “The Employer” is referred to in the document as a clearly separate entity from the government.  “The Crown” (i.e. the government) is identified as a separate entity that also “agrees” to the memo.   Therefore, the parties themselves did not treat the government as “the employer”.  I think it is pretty clear that the Liberal government is not “the employer” within the meaning of Section 70.
Could the Government be “acting on behalf of” the school boards?  Doubtful.  Can we really describe the Liberal government as a “person” acting as a puppet on behalf of school boards?  The government has its own agenda, and remember that the school boards were also given “secret payments” to offset their bargaining costs as well.  Since Section 70 only regulates the employees’ employer, or “a person acting on behalf of an employer”, and the government is likely neither of these, it is far from clear that Section 70 even applies here.
Thirdly, let’s assume that someone with legal standing (who would that be?) comes forward and files a Section 70 complaint.  Now let’s imagine for fun that the complaint succeeds.  What is the result?  The answer is found in Section 53, which renders any collective agreement in which “an employer” has provided financial assistance to a union void.  Therefore, we would back where we started, with no collective agreement and the teachers in a legal strike position.   Wonderful.
And lastly, and this is not really a point about Section 70 per se, it is not uncommon for governments to subsidize actors who will incur economic costs or losses arising from the introduction of new government legislation.  Just take a quick look at the impending Trans-Pacific Partnership agreement in the news today.  The feds have promises over $4.3 billion to help subsidize dairy farmers alone, who are expected to experience losses due to the deal.    Is it much different for a government to give money to unions and employers who incur additional expenses due to the enactment of a new more onerous and time-consuming collective bargaining model?  What if the money goes to training negotiators from the school boards and the unions in the hopes that this will help reach a deal or improve relationships in the future?  Would that also violate Section 70?
Issues for Discussion 
1.    What arguments would you make to counter my analysis of Section 70’s application to the government’s payment to the teachers’ unions?
2.    Do you think the law should prohibit a government from giving money to a union to offset bargaining costs associated with a new legislative model?  Why or why not?  Should the law also prohibit a government from giving money to offset bargaining costs to employers as well?
3.    One of the teachers’ unions in Ontario declined to accept any money from the government.  Why do you think it did that?  Should the other unions have also refused the money?