The Supreme Court of Canada this morning released its decision in the 2005 closing of Wal-Mart's
Jonquiere, Quebec location upon certification by the United Food
and Commercial Workers union ("UFCW"). The store
opened in 2001 and in 2004 the Commission des relations du travail,
Quebec's equivalent of the Ontario Labour Relations Board,
certified the UFCW as bargaining agent for the store's
employees. In the following months, the two sides were unable
to negotiate a first collective agreement, and on February 2, 2005
the UFCW applied to the Minister of Labour to appoint an arbitrator
to settle the dispute. One week later, Wal-Mart advised that
it intended to terminate the contracts of all of the approximately
200 employees and close the store on May 6, 2005 for business
reasons. In fact, Wal-Mart closed the store on April 29 that
The Union filed a number of complaints, believing that
Wal-Mart's decision was informed by anti-union
considerations. The complaint considered by the Supreme Court
of Canada in this case was that Wal-Mart violated s.59 of
Quebec's Labour Code, which prohibits employers from
changing employees' conditions of employment while a collective
agreement is being negotiated. It is substantially the same
provision as subsection 86 (1) of Ontario's Labour
Relations Act, which is also known as the "statutory
freeze". The labour arbitrator agreed with the UFCW,
finding that Wal-Mart's decision was not made for business
reasons. That decision was upheld by the Superior Court,
however, Quebec's Court of Appeal disagreed, stating that the
statutory freeze did not apply in the circumstances. The
Union appealed to the Supreme Court. Today, in a 5 to 2
majority decision, the Justices of the Supreme Court of Canada
allowed the appeal, and remanded the case back to the Arbitrator to
determine the appropriate remedy.
In its decision, the Court agreed with the arbitrator's
finding that the employer had not shown the closure to have been
made in the ordinary course of the company's business. It
was determined that the change was not consistent with the
employer's past management practices or with those of a
reasonable employer in the same circumstances. In fact, the Supreme
Court held that it was reasonable to find that a reasonable
employer would not close an establishment like the Jonquiere
Wal-Mart, which evidently was performing very well with its
objectives being met to such an extent that bonuses were being
This decision should serve as a reminder than an employer is
statutorily barred from altering its employees working conditions
while a collective agreement is being negotiated. The purpose
for the prohibition is to ensure that the employer does not attempt
to place any undue pressure or influence on its employees to accept
less-favourable terms of employment in a collective
agreement. Further, if an employer were to make such changes
to its employees' work terms, the Union would likely file an
unfair labour practice complaint alleging that the employer, guided
by anti-union motive, attempted to interfere in the trade
union's representation of employees.
Serious consequences may follow from breaches of labour
relations legislation; we will be following this case as it goes
back to the arbitrator to determine exactly what penalty Wal-Mart
will suffer in the circumstances. Ideally, an employer would
not find itself in that situation, and the lawyers at CCPartners
are experienced and able advise your company on how to manage your
employees during collective agreement negotiations, to ensure
compliance with the law and to minimize exposure.
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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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.
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