In a much-anticipated decision in the field of labour law, the
Supreme Court of Canada rendered a judgment on Friday, November 27,
confirming that the definitive closure of a business, even to avoid
dealing with a union, does not give rise to a wrongful dismissal
action under sections 15-19 of the Québec Labour
Code. In the companion cases Plourde v. Wal-Mart
Canada Corp. and Desbiens v. Wal-Mart Canada
Corp., the Supreme Court was called upon to define the scope
of the employer's right to cease operations, even where the
alleged reason for the business closure was the employer's
unwillingness to deal with a union that had recently obtained
certification of the workplace.
The case arose in circumstances where Wal-Mart Canada Inc. had
closed one of its stores located in Jonquière, Québec
some time after a union had been certified to represent employees
at the store. After several fruitless bargaining sessions between
the union and the employer, the union filed an application under
the Québec Labour Code to establish the provisions
of a first collective agreement. The Québec Minister of
Labour referred the dispute to arbitration and notified the parties
of the referral. That same day, Wal-Mart informed the employees of
its decision to close the store. Many proceedings were initiated by
the Wal-Mart employees or their union arising out of the
store's closure, which was presented by the union merely as a
step taken by Wal-Mart in a larger employer strategy of
"hindrance, intimidation and union-busting".
In its judgment, the majority of the Supreme Court held that
although anti-union animus could, in principle, constitute the
basis for awarding compensation under the unfair labour practice
provisions of the Québec Labour Code, the wrongful
dismissal provisions assumed the continued existence of a
workplace. Definitive closure of a business, even for alleged
anti-union reasons, could not give rise to a wrongful dismissal
action. Furthermore, there was no evidence to suggest that the
employees were dismissed for any reason other than the fact that
the establishment where they were employed was definitively closed,
or that the closure of the establishment was motivated by anything
other than legitimate business reasons. The employees' appeals
were therefore dismissed.
The Supreme Court also noted that this rule in Québec
differs from those of other provinces, observing that "a
distinguishing characteristic of federalism is that in matters of
provincial labour relations the various provinces are free to
strike their own balance according to their varying circumstances
Davies successfully intervened on behalf of the Canadian Chamber of
Commerce in favour of Wal-Mart before the Supreme Court.
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