In a case that pitted B.C. health unions against highly contentious labour legislation, the Supreme Court of Canada ruled Friday that the collective bargaining process is protected by the Charter of Rights and Freedoms.

In a 6-1 decision, the high court threw out sections of British Columbia's Bill 29, saying they interfere with that process "either by disregarding past processes of collective bargaining, by pre-emptively undermining future processes of collective bargaining, or both."

The law, passed by Gordon Campbell's Liberal government in 2002, allowed the province to tear up the B.C. Hospital Employees Union contract and led to the layoff of more than 8,000 unionized health-care workers. Two years later, under Bill 37, the government imposed a 15 per cent pay cut on HEU members.

Union hails ruling as 'huge victory'

"This is a huge victory for both health care and health-care workers because the Supreme Court of Canada said that Bill 29 violates the freedom of association protections in the charter, which cover the right to free collective bargaining," said HEU president Judy Darcy.

"In particular, the Supreme Court said that the denial of the right to negotiate around the issue of contracting out in health care was unconstitutional," she said.

The ruling gives the government 12 months to renegotiate contracts with the 38,000-member HEU, the largest of the unions fighting the legislation. Darcy said she wants the government to immediately halt a further 650 pending layoffs at several long-term-care facilities.

In addition to the section on contracting out, the court found that provisions in the Health and Social Services Delivery Improvement Act dealing with layoffs and bumping rights also restricted the unions' right to collective bargaining.

The law allowed for contracting out of non-clinical services previously performed by union members and eased layoff notice provisions. It also prevented health unions from negotiating job security clauses in subsequent contracts.

In 2004, the B.C. Court of Appeal ruled against the unions, saying the law does not violate their bargaining rights.

Bill 29 was pushed through the legislature in three days after the government said health-care employers needed more flexibility to cut costs.

The Supreme Court of Canada justices said there was little evidence that the government made any meaningful effort to consult with the unions before bringing in the legislation.

Public policy change, minister says

B.C. Health Minister George Abbott said he's disappointed with the ruling, adding that government officials are still assessing its implications.

But the minister acknowledged Friday's decision represents a significant change of course in Canadian labour law.

"There is no appealing the ruling. We will have to understand the ruling and attempt to construct public policy consistent with the ruling," he said.

Kenneth Thornicroft, a professor of labour law at the University of Victoria, said the judgment signals that the country's top court is willing to extend constitutional protections to collective bargaining rights.

"Governments still have room to manoeuver, so to speak, but if they are going to change existing collective bargaining agreements, they have a duty to meet with the union."

Workers may be entitled to compensation

He also told CBC News the ruling may mean thousands of laid-off HEU workers may be entitled to back pay and compensation.

"There may well be back pay that's owed. I'm not suggesting that every single employee is going to get their job back. I don't think that's going to happen. But there may well be measures of compensation that are going to be negotiated, and people may well be entitled to some form of back pay."

NDP Leader Carole James is calling on the Liberal government to recall the legislature to rescind Bill 29, in light of Friday's Supreme Court ruling.

"I think the first step of good faith that Gordon Campbell could do, in fact, is rescind Bill 29. That's the first step they could do, and then go back to the bargaining table.

"This gives them a year, but I think they don't have to wait a year. They could sit down and bargain right now, withdraw that bill, show that they were wrong, show that the Supreme Court was right and get on with improving health care."

James also said the government should put all contracting out in the health-care sector on hold.