Globe reporter Adrian Morrow.
Was it illegal for Ontario's Liberal government to make $3.74-million worth of secret payments to four teacher and support staff unions?
Since The Globe broke the story of the payments six weeks ago, this has been the single most frequent question we've received from readers. Many of them point to Section 70 of Ontario's Labour Relations Act, which stipulates that "no employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall … contribute financial or other support to a trade union."
Section 70 sounds pretty definitive. But as I've learned, after asking several labour lawyers and scouring legal databases for decisions that cite this section, the truth isn't quite so clear-cut.
Some background: In 2008, the provincial government got directly involved in negotiating teachers' labour deals, which previously involved only local school boards. Ostensibly to offset the unions' extra costs from the new provincewide negotiations, the government cut them cheques. Critics say the payments constitute a relationship that's too close for comfort, given the political support the unions give the Liberals at election time, when they frequently run ads attacking the opposition Progressive Conservatives.
So, were the payments illegal? The short answer: It depends on whom you ask.
David Doorey, an associate professor of labour and employment law at Toronto's York University, says no.
"I think this is a political hot potato in search of a legal theory that doesn't exist," he said. "It's a big stretch to argue that Section 70 applies to this sort of payment."
In Mr. Doorey's view, there are three reasons it doesn't apply.
The first, he argues, is that this section of the law is meant to prohibit unions created by employers. That's not the case for teachers.
One recent case appears to back up this assertion. In a 2012 decision, the Ontario Labour Relations Board dismissed a complaint by Larry Grovum, a professor at the University of Guelph, who alleged that a payment from the university to the faculty association breached Section 70. The board ruled that Section 70 is meant only to prohibit companies from setting up their own unions to keep employer-controlled unions out of the workplace, and it is not a blanket ban on all employer payments to unions.
"Such payments are not contrary to Section 70 of the Act. As noted the purpose of Section 70 is not to prevent conflicts of interest but to prevent employers from supporting one trade union over another. It does not operate to preclude the creation of collective agreement obligations," the board ruled.
Mr. Doorey's second reason is that the wording of Section 70 specifies that it applies to employers and employees. The Ontario government is technically not the teachers' employer, he points out: The employers are the school boards.
The third is that this payment could be seen merely as compensation to a particular interest group that may be hurt by a government decision – the sort of thing governments do all the time. Mr. Doorey likens it to the federal government agreeing to give $4-billion to dairy farmers to offset the economic effects of the Trans-Pacific Partnership trade deal.
"Is a payment to subsidize unions and employers for additional expenses due to a complicated new bargaining law that much different?" he said.
Allan Rouben takes a very different view. Mr. Rouben, who practises employment law in Toronto, contends that Section 70 is about more than just prohibiting employer-run unions. He says the law is about making sure that unions and employers stay at arm's length and do not cut "sweetheart deals."
If a union and an employer are too close, he said, this could motivate the union to work against its members' interests, or motivate the employer to work against its owners' interests (in this case, the interests of taxpayers).
Mr. Rouben contends that you would have to effectively prove two things to make a Section 70 challenge stick: first, that a payment took place and second, that the payment created an improperly close relationship.
"I do think Section 70 can be applied to the circumstances of the teachers' payments, if it can be shown there may have been a quid pro quo, or the payments were in some way related to the unions' electoral support of the government," he said.
"The fact of a payment in and of itself doesn't amount to a breach of the statute. You have to look at it in the context in which the payment was made and whether there was some impropriety associated with it."
Mr. Rouben points to another labour board decision to buttress his argument. In 2004, the board considered an accusation by Loblaws employee Benjamin Blasdell that a $450,000 payment from the company to its union, the United Food and Commercial Workers local 1000A, breached Section 70. The payment was part of a deal over how workers at new Superstore outlets would be unionized.
The board ruled against Mr. Blasdell but left open the possibility that, if you could prove a payment had caused a union to acquiesce to employer demands, this would violate Section 70.
"The allegations made in the application do not rise to nearly the level of employer support to sustain a case of violation of … Section 70," the board wrote. "The only allegation is the payment, along with the assertion that the mere payment constitutes a violation. There is no allegation that the union has become employer dominated. There is no suggestion that the union has, in other ways, become subservient to the employer."
Brian Smeenk, a partner at Fasken Martineau who handles employer-side matters in both public and private sector labour negotiations, sees both sides of the question.
On one hand, he says, the government could argue that compensating the union for bargaining costs as part of a negotiated settlement falls well short of a "sweetheart deal."
On the other hand, Mr. Smeenk said, union members could argue that the union was in a conflict of interest by taking the money.
"The union members might be asking themselves, 'What did my union give up to get that million dollars?' " he said. "The question for the OLRB, if this came before it, would be whether these payments crossed the line from a properly negotiated union benefit to improper financial support like a sweetheart deal."
Individual teachers could probably get this before the labour board by arguing that the union breached Section 74 of the Act, which mandates that unions represent their members fairly, backed up by the Section 70 prohibition on payments from employers to unions, Mr. Smeenk said.
Mr. Smeenk also searched for a decision that explained how Section 70 should be interpreted. One 1982 labour board case, Appleman vs. BSOIW, deals with a different matter – an employer paying an employee's legal costs during a tussle with a union – but summarizes the legal principles involved.
The basic idea is that employers are not supposed to interfere with employees' unions in any way, whether to help or hinder their activities.
"Apart from the right to express his views, a right whose exercise requires some care, the Act imposes a simple rule for the employer: 'Do not interfere,' " the board wrote in that case.
So, yes, it is conceivable that someone – presumably individual teachers – could argue that the payments to the unions violated provincial labour laws.
But there would be a steep hill to climb in convincing the labour board.
Adrian Morrow