The Ontario Labour Relations Board recently issued a decision
against Richtree Markets Restaurant. Richtree's loss was
predictable, even to people like me, who believe unions are on a
steep decline toward eventual virtual extinction.
Any opportunity to de-unionize causes most employers to
salivate. But they must be smart about how they do it. The
advice which lead Richtree to take its position was simply wrong. I
said so publicly when the union first brought its unfair labour
About 50 unionized employees of the Richtree restaurant at the
Toronto Eaton Centre were terminated when the restaurant was
relocated, likely for good reason and profitability. However,
someone told Richtree the best way to save money would be to argue
that the unionized rights of the fired employees did not apply at
the new location down the hall from the old one.
When the new location opened, the union filed a complaint,
asking the OLRB to sanction the company. Once an employer is
unionized, the unit of employees is generally defined by
geographical scope; the scope could be large (ie. all of Manitoba),
or small (ie. a street corner). In this case, Richtree argued that
the scope was limited to the precise location within the Eaton
Centre where its restaurant used to be.
The decision hinged on a combination of common sense and the
extent to which the labour board would allow a group of unionized
employees to be rendered jobless. Richtree assumed it could win the
case on a technicality — a position that was ludicrous, from
a legal and public policy standpoint.
In its decision, the board commented on the address cited in the
collective agreement to define geographical scope and ruled it was
essentially a proxy to include the entire Eaton Centre.
In practice, this means if the collective agreement representing
the employees from the old Richtree location still survives
(meaning it has not expired) it will now apply to all the new
non-union employees at its new location. It voids any individual
employment contracts they might have with Richtree. This could be
financially damaging for Richtree as the individual non-union
agreements employment contracts likely had lower wages, benefits,
paid sick days, etc.
Among the financial blows to Richtree, there is also the
"just cause" provision for discipline and dismissal in
collective agreements. Without this the employer can fire employees
for any or no reason at all as long as there is no violation of the
Human Rights Code. Now, they will have to prove cause for discharge
or risk re-instatement. Richtree best knows the
implications of this decision. After all, it used to be their
The win likely came at a cost for the union, too. At least a
few, if not most, of the new employees at the restaurant's new
location will lose their jobs because most collective agreements
have recall rights if employees are laid off. Richtree may have to
recall the old employees in accordance with the provisions in the
collective agreement and terminate the new ones if there are not
enough jobs to go around triggering costs and bad will all
Lessons for employers:
You can't close your operations, open a new one a few
metres away and throw out the union.
Refrain from doing anything blatantly and inherently unfair in
your battles with unions. In this case, the Ontario Labour
Relations Board likely wanted to send a strong cautionary message
to employers looking to displace unionized employees on
Be conscious of your public image: There is something about
collectively terminating a group of people (in this case mostly
immigrants) that garners a great deal of public sympathy and
antipathy toward your product or service.
This article originally appeared in the Financial
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).