It is already well established in the case law that Article 45
of the Labour Code is only applicable within Québec
and has no extra-territorial reach. As such, an employer may sell,
assign or transfer either part or all of its operations to another
province without affecting the transfer of the certification or of
the collective agreement, as the case may be.
However, can the provisions of a collective agreement limit an
employer's right to transfer work performed in an establishment
located in Québec to one of its other establishments located
outside the province?
This issue was considered by the Superior Court of Québec
in Parmalat Canada v. Tremblay,1 in
the context of a review of an arbitration award.
The union was certified to represent all office and laboratory
employees, except for the company's executive secretary. The
address indicated in the certificate was that of the factory in
Under the collective agreement:
2.02 An employee excluded from the
bargaining unit shall not carry out work usually carried out by an
employee if this could result in the layoff or in the continuation
of the layoff of an employee. [Translation]
The parties had asked an arbitrator to determine whether
Parmalat had the right to transfer work carried out by an employee
in the Victoriaville factory to a factory located in Ontario, with
the understanding that this could result in layoffs.
The arbitrator concluded that the employer did not have this
right. It was held that the collective agreement clause that
forbade the transfer of work to employees outside the bargaining
unit applied not only to the establishment in Victoriaville, but
also to any other establishment, even one located outside
Québec. Surprisingly, the arbitrator decided that such a
collective agreement clause, irrespective of the context in which
it had been imposed, should serve to protect the employment of
employees covered by the certificate, regardless of where they are
The Superior Court of Québec
The employer asked the Superior Court to review the
arbitrator's decision, raising, in particular, its alleged
The court noted that while the inclusion of the civic address in
the text of the agreement was unprecedented in other collective
agreements, this mere fact did not mean that the parties intended
to limit the reach of the contractual clauses to the factory in
Victoriaville. In this regard, we note that Parmalat had
"inherited" both the collective agreement and the
certification following the purchase of the factory from Lactantia
Ltd. At the time of the purchase, there was but one establishment.
The court concluded that the parties were considered to have taken
into account the new reality of the business.
The court also dismissed the employer's argument with
respect to the extraterritorial reach of the arbitrator's
decision. According to the court, the employer had contractually
limited its freedom to outsource tasks to other employees outside
the bargaining unit. In the court's view, employees outside the
bargaining unit include not only employees of the establishment
identified by the collective agreement, but employees of any other
of the employer's establishments as well.
According to the court, the arbitrator's interpretation of
such an undertaking affects in no way the geographical reach of the
certificate. Rather, the undertaking merely serves to protect the
employment of the persons working in the certified
Lessons for Employers
You need to pay particular attention to the provisions of
collective agreement dealing with outsourcing tasks, and to their
wording. The extraterritorial reach of such a clause shall not be
sufficient to limit its application; the employer who wishes to
control subcontracting or outsourcing with respect to one
establishment or geographic region will have to do so using express
1 D.T.E. 2009T-665
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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