Replacement worker ban and new essential services regime for federally regulated workplaces

Upcoming changes to federal labour laws will prohibit employer engagement of replacement workers during labour disputes and will require employers and unions to negotiate essential services that will be maintained during work stoppages. 

Bill C-58 changes coming into effect on June 20

On June 20, 2025, Bill C-58, An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, 2012 will come into force. This legislation provides for significant changes to the law of federally regulated collective bargaining and labour disputes. As of that date, all federally regulated employers:

• will be prohibited from using replacement workers, or bargaining unit workers, who seek to “cross the picket line,” to do the work of unionized employees in a bargaining unit that is on strike or locked out.  There are only narrow exceptions. The unlawful use of replacement workers will constitute an offence that may give rise to a fine not exceeding $100,000 for each day if the employer is found guilty.
• entering into bargaining for a new collective agreement will be required to negotiate with the union a Maintenance of Activities Agreement (i.e. an “essential services” agreement). This agreement must describe the services, operations of facilities or production of goods that will be maintained during a strike or lockout to prevent immediate and serious danger to the health or safety of the public (if any – the parties may agree no such activities need be maintained). If the parties do not reach an agreement, the issue of Maintenance of Activities will be determined by the Canada Industrial Relations Board. At present, agreement on Maintenance of Activities is an optional matter either party may trigger during bargaining, but it is not mandatory.

Both of these changes will require employers to revisit their approach to collective bargaining and labour disruptions. Negotiation of maintenance of services agreements will become a required part of the bargaining process, though disputes will likely still arise as to the scope of essential services. The ban on replacement workers may have a greater practical impact, particularly in industries where replacement workers have, in the past, been a viable means of business continuity during work stoppages. Protracted strikes or lockouts may now be more costly.  Even employers who could not operate during a dispute but who continue some activities (maintenance, shut down, customer support, etc.) will need to consider who can be used to do what work after a dispute commences.

The changing landscape of replacement worker bans in Canada

Replacement worker bans represent a shift in bargaining power away from employers and toward unions in the collective bargaining process. Should bargaining reach an impasse, a work stoppage represents not just a potential reduction in work, but potentially a total cessation of bargaining unit work. Any further expansion of replacement worker bans would be a significant development for employers.

Since the June 2024 adoption of Bill C-58, there have been two further expansions of replacement worker bans in Canada:

• British Columbia court extends replacement worker ban out of province. In August 2024, a British Columbia court held that province’s replacement worker ban could have “extraterritorial effect” to prevent an employer from moving bargaining unit work from a BC location to a location outside the province. This decision is being appealed and we expect a decision soon. 

The outcome of this litigation may affect the territorial reach of replacement worker bans in other jurisdictions, including the federal jurisdiction. While the federal jurisdiction exists throughout Canada, similar reasoning might fetter an employer’s ability to relocate federally regulated bargaining unit work outside Canada during a work stoppage.

• Manitoba passes similar legislation. Prior to 2024, only two Canadian jurisdictions – British Columbia and Quebec – had a replacement worker ban in place. In November 2024, Manitoba became the third jurisdiction to adopt a ban. See our update Manitoba adopts pro-union legislation.

As of June 20, 2025, there will be four Canadian jurisdictions with replacement worker bans in place, and potentially an expansive interpretation of the territorial reach of those bans. Further developments in this area should be of significant interest to employers with unionized workforces, throughout Canada.

Our team continues to monitor new developments in Canadian labour legislation and case law and will publish further updates as developments arise.