Bring a saucepan of water to a boil. Add onions and simmer, 2 min. Drain and immediately immerse into a large bowl of ice water to cool, 5 min. Using a paring knife, cut off the root ends. Slide skins off then discard. Set onions aside.
Fry bacon in skillet over medium-high heat until cooked but not crispy, about 6 min. Transfer to a plate. Drain all but 2 tbsp (30 mL) of fat from the skillet. Add onions and cook over medium-high heat, stirring often, until golden, about 8 min. Add salt, pepper and 1 cup (250 mL) water, scraping up brown bits from bottom of skillet.
Reduce heat to simmer, cover and cook, 15 min. Stir in peas, cover and cook 5 min. more or until peas are tender but still bright green. Just before serving, stir in reserved bacon, butter and thyme.