On June 27, 2014, the Supreme Court of Canada issued a decision that is of much interest to the
majority of the workforce and employers and that presents a
significant impact on certain well established legal
In 2001, Wal-Mart opened a store in Jonquiere. In 2004, the
Labour Board certified the United Food and Commercial Workers,
Local 503 ("Union"),as the representative of all of the
employees of Wal-Mart's Jonquiere establishment. In the months
following the Union's certification, the parties met several
times in order to bargain a first collective agreement. In early
2005, after unsuccessful negotiations, Wal-Mart announced that, for
business reasons, it was closing the Jonquiere store. Approximately
200 employees were laid off as a result. Claiming that this
decision was motivated by anti-union reasons, the employees and the
Union filed several claims against Wal-Mart. Most of the decisions
stemming from such claims have been in favour of the employer.
The present case deals with a complaint filed by the Union
pursuant to section 59 of the Quebec Labour Code. The Union claimed
that the termination of employment of the employees of Wal-Mart
constitutes a unilateral modification of their working conditions,
which is prohibited under section 59 following the certification of
a Union. The arbitrator who first heard the complaint found that
Wal-Mart did not prove that the decision to lay off its employee
was made in the normal course of business. This decision was
however overturned by the Quebec Court of Appeal. The Union
appealed before the Supreme Court of Canada.
In its decision, the Supreme Court of Canada ruled that section
59 of the Labour Code was created to foster the right of
association. The Court also stated that the decision of an employer
to modify the working conditions of its employees does not require
any anti-union "animus" in order for section 59 to apply.
A Union would only have to prove that the employer unilaterally
modified the working conditions of its employees after the
certification of a union and that the modification was not carried
out in the normal course of business. But what constitutes the
"normal course of business" of an employer? The Court
determined that an arbitrator will have wide discretion to assess
this issue depending on the facts of the case. In deciding so, the
Supreme Court of Canada confirms that the closing of a business
does not justify an employer to lay off his employees.
The Court therefore confirmed the arbitrator's initial
decision and returned the case to an arbitrator to determine the
appropriate remedy, which will likely be the granting of damages.
The exact nature of these damages is unspecified and one could
question how the principles of the infamous 2006 decision of the
Supreme Court in the Isidore Garon case would apply in the
granting of such damages by the arbitrator under for such a
violation of section 59 of the Labour Code1.
Finally, we wish to point out that the Court was careful in
stressing that the right of an employer to close its business still
exists under section 59 of the Labour Code. Employers should
therefore be reassured that this decision does not deprive them of
the power to close their business for actual bona fide economic
reasons. Hence, employers must justify that the closing if its
business was done in the normal course of business and that any
reasonable employer would have taken the same decision.
It will be interesting to follow the various reactions to this
controversial decision and analyze its consequences in the
unionized world in the years to come.
1 Isidore Garon ltée c. Tremblay; Fillion et
Frères (1976) inc. c. Syndicat national des
employés de garage du Québec inc.,  1
R.C.S. 27, 2006 CSC 2
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