In February 2010, the Canadian Union of Postal Workers filed an application for certification for the purpose of representing the employees working at postal outlets in various Shoppers Drug Mart and Pharmaprix drug store franchises across Canada. The union argued that the franchisor, the Canada Post Corporation, was the employer of the postal outlet employees.

However, in a decision of the Canada Industrial Relations Board (“CIRB”) on July 3, 2013 (Canada Post Corporation, 2013 CIRB 690), the CIRB ruled in favour of Shoppers Drug Mart, Pharmaprix franchisees and Canada Post Corporation, by dismissing the Canadian Union of Postal Workers’ application for certification.

The CIRB concluded that the true employer of the employees who were the subject of the application for certification was the franchisee of each Shoppers Drug Mart and Pharmaprix establishment named in the application, and not the Canada Post Corporation. The franchisees met all the requirements of an employer. This is because the franchisees were responsible for hiring, setting wage rates, making decisions on employee benefits, granting leave requests, determining work schedules and hours or work for employees and maintaining personnel records and records and employment.

Whether the franchisor or the franchisee is considered the “true employer” depends on a variety of factors, which need to be assessed and evaluated on a case-by-case basis.