On November 27, 2009, the Supreme Court of Canada upheld the Québec Court of Appeal’s decision holding that sections 15 to 17 of the Labour Code of Québec (“Code”) were not applicable where a company decided to close down permanently. Sections 15 to 17 of the Code deal with reinstatement, indemnification, complaints and the burden of proof required where an employer imposes a sanction upon an employee in response to the latter exercising a right under the Code.
Having chosen to bargain collectively through the United Food and Commercial Workers Union, Local 503, the Jonquière Wal-Mart became the first Wal-Mart store to be unionized in North America. However, this turned out to be a Pyrrhic victory since on the same date the Minister of Labour submitted the dispute to an arbitrator (February 9th, 2005), Wal-Mart announced the closure of its Jonquière store.
Numerous complaints were filed with the Commission des Relations du Travail (“CRT”) as a consequence of this apparent anti-union conduct. Not surprisingly, the Court’s decision was highly anticipated since it examined the possibility of seeking recourse through sections 15 to 17 of the Code where a store no longer existed. In the Complaint, the Complainant employee stated that: “I lost my employment because of the unionization of my establishment” and sought reinstatement. In response, Wal-Mart argued that “the appellant lost his job not because of his union activities but because the store no longer existed and therefore, no jobs were available.”
For the majority, Justice Ian Binnie clarified that the issue before the Court was strictly a procedural one and that the Court would not be engaging in a “general inquiry into Wal-Mart’s labour practices.” In the majority’s view, “the issue is whether an employee in such circumstances has the benefit of the presumption in s. 17 that the loss of jobs was a “sanction” imposed for an unlawful motive, namely, union busting.”
While the minority argued that sections 15 to 17 of the Code did not preclude the Court from utilizing the general remedial sections of the Code (118 & 119) to award compensation based upon a finding that the closing was motivated by anti-union animus, the majority affirmed that, when a business is closed down, a dismissed employee cannot seek reinstatement through section 15 of the Code because that section implies the existence of an ongoing workplace. As the majority put it: “The reference in s. 15 to an order to “reinstate such employee in his employment” (…) signals quite unambiguously the legislative contemplation of an ongoing place of employment as the foundation of a successful s. 15 application (…).”
In addition, the Court found that the statutory presumption or reverse onus provided by section 17 of the Code did not apply in the case at bar, since the courts have consistently maintained that the closure of a store is a “good and sufficient reason” for the dismissal of employees. Thus, the indemnification provisions were held to be restrained to circumstances involving ongoing businesses.
Accordingly, the Court reiterated the rationale expressed in Place des Arts and City Buick that: “if an employer, for whatever reason, decides as a result to actually close up shop, the dismissals which follow are the result of ceasing operations, which is a valid economic reason not to hire personnel, even if the cessation is based on socially reprehensible considerations.”
The majority held that the reason for the closure of the business is a distinct and broader question that could only be analyzed through sections 12 to 14 of the Code. These provisions, fundamentally separate from sections 15 to 17 of the Code, provide alternative relief to the unfair labour practice sections and could, in the event that the closure was proven to be the result of anti-union animus, allow the CRT to use its general remedial powers to make any order “for the benefit of all employees.” Since sections 12 to 14 are not subject to the statutory presumption outlined in section 17 (that it is presumed that the sanction was imposed by the employer because the employee exercised a right under the Code), the union had the burden to prove the anti-union misconduct on a balance of probabilities. These sections were in fact pleaded in Boutin v. Wal-Mart Canada Inc., a case pertaining to the closure of the same store, but the proceedings were unfortunately discontinued in 2007. The majority hence concluded that a union or employee could validly claim, under section 12 of the Code, anti-union misconduct since this section focuses directly on the reason for the closure.
The majority viewed the distinctions between sections 12 to 14 and 15 to 17 of the Code as necessary to maintain the balance between employers and employees as was intended by the Québec legislature. On that basis, the majority found the Code to be consistent with the Canadian Charter of Rights and Freedoms and the Québec Charter of Human Rights and Freedoms. Where an employee sought relief (i.e. damages) under the general remedial provisions of the Code, he or she must proceed via sections 12 to 14 and prove that the employer’s motive in closing down its business was tainted by anti-union animus. As a result, the majority, referring to the Place des Arts case, held that a closure does not “immunize an employer from all financial consequences of related unfair labour practices,” nor does it preclude a finding that such a closure “constitutes an unfair labour practice aimed at hindering the union or the employees from exercising rights under the Code.” Therefore, while the Court made it clear that it could not force a store to stay open or to re-open against its will, employers do not have “carte blanche” to close down their stores regardless of the underlying reason for doing so.
In this long awaited judgment, the Supreme Court of Canada has clearly invited unions or employees in Québec to use sections 12 to 14 of the Code in order to prove that their employer’s decision to close down was motivated by anti-union animus. Once that hurdle is overcome, the general remedies that are provided by sections 118 and 119 will be available to unions and employees to seek compensation before the CRT.