Since the start of pandemic, our courts have rendered a number of decisions regarding the impact of COVID-19 and whether it constitutes superior force (commonly known as "force majeure" ) for the purposes of limiting liability. In particular, we can think of numerous cases in real estate law, whereby lessees and owners looked to the courts for either relief or an order for payment after businesses were forced to shut down by government decree.
But how has COVID-19 as a "force majeure" played out in labour law?
A recently published arbitration decision – SCP, sections locales 2229 et 2301 et Ville de Blainville (grief collectif), 2020 QCTA 644, provides clarity.
In this case, following the government decrees regarding a state of emergency and the suspension of non-essential activities due to COVID-19, the city offered its permanent members not identified as essential workers the possibility of either getting an advance of wages, using up accrued time banks or benefiting from employment insurance (and thus be considered temporarily laid off). A number of employees chose the latter option. The union argued and grieved that the employer had unlawfully temporarily laid off permanent union members covered by job security clauses under the collective agreement.
Analysis: CBA + force majeure
In his decision, the arbitrator provides a thorough analysis of the application of job security and management right clauses under the applicable collective agreements. In light of the global pandemic and the government decrees forcing employers to suspend non-essential activities, none of the enumerated situations providing job security was applicable, including the union's position that this situation created a "surplus of personnel" prohibiting layoffs. The city acted in good faith within its own protected management rights when it laid off permanent union members.
But what of the employer's subsidiary argument that in all cases, COVID-19 as a superior force or "force majeure" prevented the city from meeting its obligations?
According to the arbitrator, this could just as easily have been the employer's principal legal argument. As per its legal definition, a superior force is an unforeseeable and irresistible event, freeing a person from liability for injury (article 1470 of the Civil Code of Quebec). In no uncertain terms, the arbitrator concludes that COVID-19 and its global spread meets this definition. Only two exceptions exist to this release from liability: (i) had the employer guaranteed a certain outcome despite the occurrence of a superior force or (ii) should it have taken advantage of the superior force in order to exercise its rights in bad faith.
No evidence was provided that the city had acted unreasonably when it designated which of its activities were essential. The necessity to proceed with layoffs stemmed directly from the government's decrees, which left no wiggle room for the city once it decided what constituted an essential service: the city's hands were tied. Moreover, the applicable collective agreements did not, either explicitly or implicitly, provide a guarantee to work or to a salary.
This decision reminds us that even in the most unforeseen situations, such as this global pandemic, decision-makers will continue to use their usual toolbox of interpreting collective agreements: notably that clear and precise clauses do not require interpretations to be read in, that clauses are interdependent and are understood as a whole and that exception clauses must be read restrictively. Even more importantly, this decision is significant as it is the first detailed decision recognizing COVID-19 as a superior force in the workplace, with its ensuing impact on employers' legal and contractual obligations. Note, however, that the union has filed an application for judicial review before the Superior Court of Quebec – stay tuned for developments.
About Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.
Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.
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.
For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.
Law around the world