The Supreme Court of Canada, in Québec (Procureur général) c Syndicat de la fonction publique, recently struck down a clause in a collective agreement. The clause in question prevented certain employees from challenging discipline through grievance arbitration. The Court declared the clause void because it contravened a statutory minimum standard.

These kinds of clauses are not uncommon in Canada. For example, many collective agreements contain probation clauses that limit newly-hired employees from grieving discipline. Collective agreements may also create different categories of employees to determine their eligibility to various rights and benefits.

This decision shows that, in agreeing to these kinds of differentiations and limits, parties must always be aware of applicable minimum labour standards. It also demonstrates how the authority of arbitrators in unionized labour disputes is ever growing in Canada.

The Power to Strike Down Limitations

In this case, two employees with precarious status were dismissed. One was a casual employee and the other was probationary. When their union contested their dismissals before a grievance arbitrator, the employer contested the arbitrator's authority to hear the case. It argued the collective agreement prevented certain categories of employees from arbitrating their dismissal. The two employees belonged to those categories.

But a Quebec statute contains a minimum standard to the effect that all employees who have worked at least two uninterrupted years can contest their dismissal and seek reinstatement. The two employees fulfilled that service requirement. There are similar minimum standards in the province of Nova Scotia and for federally-regulated employers, but with different eligibility criteria.

The Court found that, because the employees met the two year service requirement, the clause in the collective agreement that purported to prevent them from grieving their dismissal was void. Thus, the employees were able to arbitrate their grievances.

The Paramountcy of Grievance Arbitration

This case follows a trend in the Supreme Court of Canada to expand the authority of grievance arbitrators. More cases have supported arbitrators' power to enforce minimum labour standards and other requirements of labour, employment, and human rights laws.

This trend can be traced back to at least 1994. The Supreme Court then found that the mere reference to discrimination in a collective agreement allowed employees to grieve human rights violations. This could in turn allow the "duty to accommodate" to be disputed before an arbitrator.

In 2003, the Court pushed this trend further. It ruled that human rights laws and general labour laws could and should be enforced by arbitrators. This should occur even if the relevant collective agreement does not refer to the statutes. As a result of this trend, arbitrators can now hear and decide disputes that were traditionally resolved by public administrative boards and tribunals.

In this latest decision, the Supreme Court reaffirmed the authority of an arbitrator, even where the collective agreement on its face precludes certain categories of employees from challenging discipline through grievance arbitration. Instead of ruling that the employees had to seek redress before another tribunal, the majority of the Court struck out the offending restriction in the collective agreement. This allowed the arbitration to proceed. In the future, it is conceivable that arbitrators will be able themselves to strike down limitations bargained in the collective agreement when the limitation is found to violate a statutory standard.

Lessons Learned

This decision is of broad significance. It provides lessons to employers and unions across the country.

The decision serves as a reminder that the content of a collective agreement cannot circumvent minimum labour standards laws. (This may be different in Ontario, where section 99 of the Employment Standards Act explicitly gives unions the rights to determine how, whether and when to enforce that Act.) Employers that negotiate invalid limitations into a collective agreement do so at the risk of having them nullified.

This decision also confirms the ever growing authority of arbitrators in disputes involving unionized employees. Not only do arbitrators have basic authority over collective agreement interpretation, but they are increasingly being directed to apply minimum labour standards. Consequently, there are more occasions for parts of collective agreements to be scrutinized and potentially dismantled. This provides more reason for employers to always keep in mind applicable minimum labour laws when negotiating collective agreements.