Not a Blanket Prohibition: Federal Replacement Worker Rules Clarified by CIRB

Introduction

The Canadian Industrial Relations Board (the “Board”) has released its first merits decision interpreting the new replacement worker provisions under the Canada Labour Code (the “Code”), which were introduced in 2025 through Bill C-58. The decision clarifies that the new rules do not create a blanket prohibition on the use of replacement workers in unionized federally regulated workplaces but instead restrict the use of specified categories of persons during lawful strikes and lockouts.

In Canadian Union of Public Employees, Local 4317 v. Montreal Gateway Terminals Partnership, 2026 CIRB 1225, the Canadian Union of Public Employees, Local 4317 (the “Union”) filed an unfair labour practice complaint with the Board alleging that Montreal Gateway Terminals Partnership (“MGTP”), the entity that operates the Port of Montreal, used replacement workers in violation of section 94(4) of the Code. The Board dismissed the Union’s complaint, stating:

the clear meaning of the provisions does not allow the Board to find that Parliament intended to completely prohibit the use of replacement workers in every case or to prohibit the employer from continuing its operations in all circumstances.

Background: Federal Replacement Worker Regime

On June 20, 2025, Bill C-58, An Act to amend the Canada Labour Code and the Industrial Relations Board Regulations (“Bill C-58”) came into force and is one of the most significant amendments to the federal labour relations framework in decades.

Under the previous regime, the Code only prohibited the use of replacement workers where the employer could be shown to have used them for the demonstrated purpose of undermining a union’s representational capacity. Bill C-58 replaced this with a categorical prohibition on replacement labour during lawful work stoppages, amongst other changes, and increased the potential penalties for failures to comply.

Section 94(4) of the Code provides:

Prohibition relating to replacement workers

(4) Subject to subsection (7), during a strike or lockout not prohibited by this Part, no employer or person acting on behalf of an employer shall use the services of any of the following persons to perform all or part of the duties of an employee who is in the bargaining unit on strike or locked out:

(a) any employee or any person who performs management functions or who is employed in a confidential capacity in matters related to industrial relations, if that employee or person is hired after the day on which notice to bargain collectively is given;

[…]

(c) any employee whose normal workplace is a workplace other than that at which the strike or lockout is taking place or who was transferred to the workplace at which the strike or lockout is taking place after the day on which notice to bargain collectively is given; […]

What Happened?

The facts were largely not in dispute.

On September 18, 2025, the Union sent MGTP a strike notice pertaining to maintenance transportation agents at the trucking office. After the strike notice was issued, MGTP used four employees and one dependent contractor who worked in the administrative offices at the worksite to perform bargaining unit work. All five individuals were hired before the notice to bargain was provided, although there was a bit of a unique situation with an employee who was hired well before the notice to bargain but transitioned to a dependent contractor role after the notice as part of her early retirement.

The Decisions

The Board was clear that section 94(4) of the Code does not contain a general prohibition on the use of replacement workers, just the prohibition of certain categories of workers. The onus is on the union to prove that the employer has failed to comply with its obligations under section 94(4).

The Board affirmed that all of the individuals fell within the definition of an “employee” under the Code, as the definition of an “employee” under Part I of the Code explicitly included dependent contractors.

With respect to whether moving the employees from the administrative office to the trucking office at the same location constituted a “transfer” of the employees, the Board determined that “workplace” includes a geographical component which takes into account the place where the employees, who are in a legal work stoppage situation, perform their duties. The Board found that as the employees and bargaining unit all worked at the same address, it was not a separate geographic location from where the strike was taking place and therefore not a different “workplace.”

While there was some dispute over whether the individuals fell into the category of “any person who performs management functions” or “who is employed in a confidential capacity in matters related to industrial relations,” these issues were not considered as the Board determined that so long as an employee is hired before the notice to bargain was given, section 94(4)(a) of the Code is not violated, regardless of the capacity they work in.

Moreover, the Union wished to challenge the date in which employees were trained to perform the bargaining unit work. The Board dismissed this, indicating that it is only the hiring date, not the training date, that is relevant to the application of section 94(4)(a).

Conclusion and Key Takeaways

The Board has rejected interpreting section 94(4) of the Code as a blanket prohibition, which has resulted in some key takeaways for federally regulated unionized employers:

1. The ban is categorical, not absolute.
2. Onus is on the union. Unlike section 94(3) of the Code (where the burden shifts to the employer), under section 94(4), the onus is on the union to prove that the employer used a replacement worker in contravention of the Code.
3. The hiring date, not the training date, is determinative. It is irrelevant if workers are trained after the notice to bargain is given if they otherwise do not fall under a prohibited category.
4. “Workplace” has a geographic component. Even though individuals may work in different offices at the same site, they may be considered part of the same “location” and therefore not transferred.
5. Dependent contractors remain employees.

The Workplace Law Group at Aird & Berlis LLP provides strategic labour advice to help employers navigate union-related challenges, from resisting certification to managing collective bargaining and arbitration. Please contact the author or a member of the team if you have any questions or require assistance.