Canada: Can Employers Require Mandatory Unpaid Standby Duty?

The recent decision of the Supreme Court of Canada (SCC), Association of Justice Counsel v Canada (Attorney General), 2017 SCC 55, addressed the issue of whether a unionized employer can unilaterally introduce a policy requiring employees to provide unpaid standby duty.

Facts

For two decades, the Immigration Law Directorate in the Quebec Regional Office of the Department of Justice had a voluntary standby system in place to deal with emergency immigration matters. The standby period was from 5:00PM to 9:00PM on weeknights and from 9:00AM to 9:00PM on weekends. While on standby, the lawyers were required to carry an employer-issued pager and cell phone and to report to work within one hour of an emergency call. Lawyers who were on standby were compensated with paid leave. Lawyers received compensation whether or not they actually performed services while on standby.

As a result of budgetary constraints, a change was introduced by the employer as to how employees were compensated for standby duty. The change provided that lawyers on standby would only be paid for work actually performed while on standby. If a lawyer was on standby but was not required to perform any work, they would receive no compensation. Unsurprisingly, most lawyers stopped volunteering for standby duty.

Relying upon the management rights provision in the collective agreement, the employer unilaterally introduced a policy making uncompensated after-hour standby duty mandatory for all lawyers.

Grievance

The union grieved the employer's mandatory unpaid standby duty policy. The arbitrator concluded that the employer's policy was not a reasonable or fair exercise of its management rights and violated the liberty interests of the lawyers protected under section 7 of the Canadian Charter of Rights and Freedoms. The policy was found to be unenforceable.

Judicial Review

The employer applied for judicial review of the arbitrator's decision. The Federal Court of Appeal (FCA) allowed the appeal, set aside the decision of the arbitrator and directed another arbitrator to consider the grievance. The decision of the Federal Court of Appeal was judicially reviewed.

Decision of the Supreme Court of Canada

On judicial review, the majority of the SCC upheld the decision of the arbitrator with respect to the issue of mandatory unpaid after-hour shifts and confirmed that the policy was unfair and unreasonable. The SCC explained that, in a unionized workplace, when determining whether a policy unilaterally introduced by an employer is a reasonable exercise of management rights, arbitrators must adopt the "balancing of interests" approach, otherwise known as the KVP test.¹ The "balancing of interests" approach requires arbitrators to consider the totality of the circumstances and determine whether the employer's policy strikes a reasonable balance between the interests of both the employer and the employees.

In the case at bar, the arbitrator balanced the interests by weighing the benefit of the policy to the employer against the impact of the policy on the private lives of the employees.

The collective agreement was silent on the issue of standby duty. There was also no mention of standby duty in the employment contracts or job descriptions of the employees. The SCC emphasized that this did not grant the employer free reign to impose a policy in relation to standby duty. The SCC highlighted the inherent unfairness of the policy to stop providing compensation for standby duty, when the provision of such compensation had been a long-standing practice of the employer. The directive adversely impacted the private lives of the employees and resulted in the employer controlling their whereabouts and activities during off-hours. For these reasons, the employer's policy violated the requirement of the employer to act reasonably, fairly and in good faith under the collective agreement.

With respect to the constitutional rights of the lawyers, the SCC held that the mandatory unpaid standby duty policy did not limit the ability of the lawyers to make the type of fundamental personal choices guaranteed under section 7 of the Charter. There was no violation of the employees' Charter rights.

What This Means for Employers

This decision reminds employers that management rights must be exercised reasonably and in compliance with the collective agreement. Whether the unilateral imposition of the policy is reasonable and fair will depend on the circumstances and the terms of the particular collective agreement. Employers in unionized environments must be aware of the added difficulty of introducing a policy that attempts to change a long-standing practice of the employer. Employers must also ensure that new workplace policies are the result of a reasonable "balancing of interests". Where policies intrude on the personal lives of employees or restrict their personal interests, those policies are invalid unless the employer demonstrates a competing management interest that overrides the interests of the employees.

Footnotes

1 Re Lumber & Sawmill Workers' Union, Local 2537, and KVP Co. (1965), 16 LAC 73

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