The Supreme Court of Canada recently
rendered three decisions that finally settle the issue of the
jurisdiction of an arbitrator with respect to Section 124 of An
Act Respecting Labour Standards (ALS). These
decisions deal with employees, i.e., a teacher, a
university professor and two government employees who are credited
with at least two years of service with their employer and who
filed grievances alleging that they had been terminated without
cause, in contravention of Section 124 of the ALS. The
three decisions raise the same legal issues, and as such, the
judges' positions were consistent.
The judges unanimously decided that
Section 124 of the ALS is not incorporated into the
collective agreement. They also decided that any provision of a
collective agreement — or in an employment
contract — that prevents an employee with two years
of service from contesting a termination made without good and
sufficient cause is of no effect.
However, in cases where the parties to
a collective agreement have expressly denied the arbitration
proceeding to certain categories of employees, the judges are
divided (five to four) on this: should arbitrators nonetheless have
jurisdiction to hear the complaint and grant the same remedies as
would the Commission des relations du travail (CRT)?
The majority decision, written by
Justice LeBel, bases its reasoning on the hierarchy of the sources
of law as such:
"The status of the ALS as
a statute of public order must be considered from the perspective
of how the hierarchy of relevant sources of labour law affects the
content and implementation of collective agreements, not from that
of the implicit incorporation argument."
In other words, the legislative
superiority of the ALS renders null and void any provision that is
inconsistent with it, and for the majority; this includes a
provision that denies an arbitrator jurisdiction to oversee the
employer's decision to terminate an employee credited with two
years of uninterrupted service.
Once such a provision is set aside, the
arbitrator must see whether or not he or she has the power to grant
the same remedies as the CRT. If so — as is usually
the case — he or she must determine whether the employee
was terminated for a good and sufficient cause. If the collective
agreement does not provide for equivalent remedies, then the
employee is obliged to file a complaint before the CRT.
Writing for the minority, Justice
Deschamps criticizes the majority approach, which she views as
merely "reading out" a provision of the collective
agreement. She agrees that, considering the public nature of the
ALS, an employer cannot terminate an employee who is credited with
two years of service without a good and sufficient cause. However,
she believes that there is no requirement that the parties confer
responsibility for the enforcement of the protection on a grievance
Justice Deschamps also mentions that
the arbitrator's power to interpret and apply any laws or
regulations in the assessment of a grievance must only be exercised
when the parties have primarily given such jurisdiction to the
decision-maker. The provisions of a collective agreement limiting
the arbitration proceeding would not be contrary to public order
because they do not deprive an employee from exercising his/her
rights under Section 124 of the ALS before the CRT. As
such, neither the ALS, nor the Labour Code
prevent the parties from limiting the arbitration proceeding.
Tips for Employers
The majority ruling has considerably
limited the parties' liberty to negotiate which category of
employees will be entitled to the arbitration proceeding. Although
the theory of the implicit incorporation of the ALS in the
collective agreement has been unanimously rejected, the practical
effect of the ruling of the majority decision is somewhat
equivalent to such incorporation.
The positions of the judges were
consistent among all three decisions, as they raise the same legal
The unions are likely heartened by
these decisions, which they believe represent a victory for
employees of uncertain status.
As a result, employers should now bear
in mind that, in the event that the conditions set out above be
met, an arbitrator has jurisdiction to oversee the termination of
any employee who is credited with at least two years of
uninterrupted service. This would include any category of employee,
e.g., seasonal, temporary or contractual employees as
defined in the collective agreement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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