Labour peace was secured in B.C.'s public schools last September with the promise of millions of dollars in additional funds for special-needs education. But that money has simply been absorbed to maintain the status quo, the head of the B.C. Teachers' Federation said Monday.

"Over all, we can't say that kids are better off now," Jim Iker said in an interview with The Globe and Mail as his union prepared its latest submission in the 13-year-old legal battle over working conditions in the classroom.

"It's just made up the loss due to underfunding. In some districts, our teachers have noticed a difference … but in some areas, it is even worse."

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British Columbia's 40,000 public-school teachers voted to accept a contract to end their strike that spanned two school years and shuttered classrooms for five weeks. The six-year settlement was described as a "historic" deal that promised more support for students with special needs.

Four months after that contract was signed, the Ministry of Education cannot say how many new teachers or education assistants are being hired as a result of the additional funding – those decisions are made on a district-by-district basis, an official said, based on September enrolment figures. The BCTF estimates the public-school system would have lost 386 teachers this year had funding levels remained as forecast in the past provincial budget. Instead, it will lose only nine teachers because the contract provided enough money to hire more teachers.

The teachers' contract, which was reached after intervention from Premier Christy Clark and senior labour leaders, was supposed to signal a turning point in the toxic relationship between the union and the B.C. Liberal government. There are some signs that the relationship has improved: Last week, Mr. Iker joined Minister of Education Peter Fassbender at a workshop to share ideas for innovation in public-school learning.

But the looming appeal-court decision on teachers' bargaining rights keeps the two sides on more familiar, adversarial footing In 2002, Ms. Clark, then-education minister, introduced legislation to take away teachers' bargaining rights on class size and composition – meaning the number of special-needs students in each classroom. After losing a fight with the union twice in the B.C. Supreme Court, the government has appealed the court's judgment again.

Kindergarten students that year would have already graduated from high school by now, and still the case before the appeal court is at least months away from a decision.

And there are new developments that could affect the case: In back-to-back decisions in January, the Supreme Court of Canada ruled that members of the RCMP have the right to unionize, and that the right to strike is fundamental and protected by the Constitution.

Those decisions are significant for Canadian labour law and could have implications for the coming decision on the teachers' dispute. The highest court in the nation says the constitutional right to free association guarantees "meaningful" negotiations take place between employers and workers – an issue at the heart of the B.C. Liberal government's contract-stripping efforts.

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Chief Justice Robert Bauman of the B.C. Court of Appeal invited both sides in the teachers' case to make submissions in light of those court decisions. The BCTF has until Feb. 6 to craft its response and the province has until Feb. 11 to update its latest submission. No date has been given for a ruling from the Court of Appeal, but both sides have indicated that a further appeal of any decision is likely should the court rule against them.

Mr. Iker said he is hopeful in the meantime that the next provincial budget to be tabled on Feb. 17 will include additional funding to improve special-needs education.

With a report from Mark Hume in Vancouver