In Plourde v. Wal-Mart Canada Corp. (released November
27th, 2009), the Supreme Court of Canada found for Wal-Mart and
confirmed that a recently certified employer has no legal
obligation under labour legislation to stay in business, and that a
closure of one of its locations can constitute sufficient reason
for the termination of the employees at that location.
In August 2004, the United Food and Commercial Workers, Local
503 was certified to represent employees at a Wal-Mart in
Jonquière, Québec. The Jonquière store thus
became the first Wal-Mart in North America to be unionized. In
February 2005, on the same day that the Minister of Labour referred
the parties to arbitration in order to assist them in establishing
the terms of their first collective agreement, Wal-Mart informed
its employees that it had decided to close the the Jonquière
store. In April 2005, Plourde's employment, along with that of
approximately 190 other employees, was terminated.
Plourde filed a complaint under section 15 of
Québec's Labour Code, alleging that his
employment had been terminated as a result of his union activities.
Section 17 of the Code provides that, where an employer
dismisses an employee after the employee has exercised his rights
under the Code, there is a presumption that the employee
was dismissed because he exercised his rights. This
presumption is only overcome if the employer can demonstrate that
the employee was terminated for "good and sufficient
In this case, Wal-Mart alleged that Plourde had been dismissed,
not because of his union activity, but simply because the store had
closed and his job was no longer available. Wal-Mart further argued
that the permanent store closure constituted "good and
sufficient reason" for termination of employment within the
meaning of section 17. The Commission des relations du travail
("CRT") agreed with the employer and dismissed
The Superior Court dismissed Plourde's application for
judicial review, finding that the CRT was correct in accepting the
store closure as the reason for Plourde's dismissal, and not
requiring Wal-Mart to explain its reasons for closing the store.
The Court of Appeal similarly dismissed Plourde's motion for
leave to appeal. Plourde then appealed to the Supreme Court of
Canada, which rejected his appeal. The Supreme Court's decision
also resolved the issues, arising from the same factual scenario,
that was before it in Desbiens v. Wal-Mart Canada
The decision of the Supreme Court deals with the narrow issue of
whether a permanent store closure constitutes a good and sufficient
reason for terminating employment for the purposes of section 17 of
In a 6-3 decision, the Supreme Court stated that an employer has
no legal obligation to stay in business. Writing for the majority,
and relying on the Québec Labour Court's earlier
decision in City Buick, Justice Binnie found that a
business is permitted to close a location even as the result of
"socially reprehensible considerations".
The Court went on to find that the case law establishes that the
closure of a store or plant constitutes "good and sufficient
reason" to terminate an employee within the meaning of section
17. In other words, the closure of a business ends the inquiry into
the reasons for the employee's dismissal – the
termination is sufficiently explained by the closure. Thus, a
remedy under section 15 of the Code is not available when
there has been a store closure and the employee's workplace no
However, the Majority avoided making sweeping pronouncements
about the Charter and freedom of association, and instead
decided the case on the relatively technical and narrow issue of
the meaning of section 17 of Québec's Labour
Code. Thus, while it remains to be seen how Ontario courts
will interpret the Supreme Court's decision, the impact of the
case on employers located outside of Québec may be
Further, while it is encouraging for employers that the Supreme
Court of Canada confirmed that a store closure will not
automatically result in a finding that employees were terminated
without good and sufficient reason, the Court did indicate that a
union could be successful in bringing a complaint on the basis that
the store closure itself constituted an unfair labour practice. As
stated by Justice Binnie, a closure will not immunize the employer
from all potential negative financial consequences. A finding of an
unfair labour practice and an award of damages remain a
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