Bill C-39 at a Glance: Essential Insights for Federally Regulated Employers

Employers in relationships that have seen past conflict should plan for an earlier start to collective bargaining negotiations and earlier involvement of federal mediators.

Employers should be aware that their bargaining positions may become public through a special mediator’s report, and should bargain with that possibility in mind.

Section 107 has been in the Code since 1984 but was rarely used until recently, when the federal government invoked it to end labour disruptions such as the 2024 Port of Montreal lockout and the 2025 Air Canada flight attendants’ strike. Bill C-39 restructures the Minister’s powers under Section 107, which reflects an effort to respond to constitutional challenges raised by unions in response to the government’s recent use of Section 107.

• Before directing the CIRB to end a work stoppage or impose a settlement, the Minister must first have appointed a special mediator who has completed their mandate and delivered a report, and must have considered that report.
• When considering whether a strike or lockout adversely affects, or may adversely affect, the national interest, the Minister may consider such factors as significant impact on the Canadian economy, serious social disruption, and the effect on freedom of association.

• The Minister may only order parties to return to work once a work stoppage is underway, not pre-emptively.

Employers who have historically looked to Ottawa for rapid intervention should understand that relief under section 107 may now be slower and more conditional. It cannot be triggered until the special mediation process has run its course and a work stoppage is underway.

Successor Rights for Preboard Airport Security Screeners

Bill C-39 changes the status quo for contractors who provide preboard airport security screening services on behalf of the Canadian Air Transport Security Authority (CATSA). 

• Currently, the Code exempts bargaining agents in this industry from its successor rights provisions when a new contractor replaces a prior one, providing only that the new contractor must maintain the same level of remuneration afforded under any prior collective agreement. Bargaining agents are thus required to seek renewed certification to maintain continuous representational rights when the underlying service contract changes hands.
• Bill C-39 affords bargaining agents more traditional successorship rights, specifying that representational rights held by a bargaining agent for the employees of a prior contractor continue to apply in respect of any new contractor, and that the new contractor is subject to any certification proceedings, collective bargaining agreement, and Part 1 proceedings that pre-existed the currency of its service contract.

Wage Recovery (Part III)

• A new “settlement enforcement order” lets the Head of Compliance and Enforcement enforce written settlements of wage complaints directly against an employer or, in defined circumstances, a corporate director.
• The Head’s power to issue “orders to debtor” is expanded so third parties who owe money to an employer can be directed to pay the outstanding amounts directly to the Head.  These funds can then be used to pay employees.

Miscellaneous

• The conciliation officer’s mandate is extended from the current 14 days to 90 days, and the Minister is deemed to have received the conciliation officer’s report 90 days after the conciliation officer was appointed.

• Where parties cannot reach a first collective agreement within nine months of the notice to bargain, either party may apply to the CIRB to impose a binding method of resolving the outstanding issues. The CIRB must issue such an order, and the order will suspend the parties’ right to strike or lockout.

• Bill C-39 broadens the power to trigger an industry-wide certification. The Minister or the CIRB on its own initiative may now initiate the process to establish a bargaining unit spanning multiple employers in an industry and region.

• Where a round of bargaining involved a work stoppage or an imposed settlement, the Minister must appoint a mediator within six months of the new agreement to help the parties repair their relationship, and the parties must meet with that mediator.

• Federally regulated employees have historically earned up to 10 days of paid medical leave per year. Employers raised concerns about “stacking” this entitlement on top of comparable, negotiated leave set out in collective agreements. Bill C-39 clarifies that the paid medical leave provisions are a minimum floor, not an add-on: they will not apply where a collective agreement already provides equivalent-or-better paid medical leave and a third-party process for resolving disputes about it.

Implications for Employers and Unions

The amendments to the Code proposed by Bill C-39 are something of a mixed bag for employers and unions. Many employers will welcome the special mediator and the emphasis on early and post-dispute mediation as practical improvements, while lamenting the loss of the government’s pre-emptive powers under section 107 and the increased potential for public access to information about collective bargaining. Unions, in contrast, have been vocal in expressing their view that Bill C-39 does not go far enough, as section 107 continues to limit workers’ ability to strike. The constitutional challenges to the government’s recent uses of section 107 remain before the courts, and their outcome may ultimately override Bill C-39 or trigger further amendments to the Code.

The government has expressed a desire to move Bill C-39 through the legislative process relatively quickly, and may attempt to do so before Parliament rises for its annual summer break in mid-June of 2027. Given that the Liberals now have a majority in Parliament, it is likely that they will be able to adopt Bill C-39 on their timeline. Employers should therefore be prepared for the changes proposed by Bill C-39 to take effect as early as next year.

• Identify which of your bargaining relationships would meet the “high-risk” criteria and would trigger the mandatory early-bargaining timeline.

• Build the longer conciliation period and the special mediator process into your bargaining strategy and timelines.

• Assume that key positions could become public through a special mediator’s report.

• Review service contracts (particularly at airports and in air transportation) for the new successor-rights exposure on retendering.

• Audit paid medical leave and comparable negotiated benefits to determine whether the new “floor” clarification applies to your workforce.

• Revisit any assumption that Section 107 offers a quick route to ending a work stoppage.

We are continuing to review the detailed text of Bill C-39 and will provide further analysis as the bill moves through Parliament. Please contact us to discuss how these changes may affect your organization.