The Quebec Superior Court recently upheld an arbitration award against Wal-Mart regarding the closure of its store in the town of Jonquière in 2005. That closure is now also affecting Wal-Mart elsewhere in Canada. The Saskatchewan Court of Appeal recently indicated that Wal-Mart's actions in Quebec could possibly be perceived as an intimidation tactic against Saskatchewan employees. Here is an update of these cases.

Factual Background

In February 2005, after the Jonquière workers had voted to become the first unionized Wal-Mart store in North America, the Company announced that it was closing the store. It did so on April 29th, 2005. About 190 employees were laid off.

These events resulted in the filing of many complaints before by the employees' union. The most famous decision that resulted was that issued by the Supreme Court of Canada in 2009: Plourde v. Wal-Mart Canada Corporation.

The Supreme Court's Ruling : Can An Employer Close Down Its Store?

Plourde lost because he based his complaint on sections of the Quebec's Labour Code which provide for the remedy of reinstatement. The Supreme Court ruled that Wal-Mart had the right to permanently close its store. Reinstatement could thus not be awarded.

Despite this favorable outcome for Wal-Mart, the Supreme Court's decision left the door open for complaints based on other parts of Quebec's Labour Code. The Supreme Court clearly indicated that employees could claim damages or other remedies if they are able to prove that the store was closed for anti-union reasons. Consequently, even though an employer cannot be forced to remain in business, it may expose itself to adverse financial consequences if its purpose is anti-union. (See our December 2009 bulletin about this ruling.)

A Decision Made Under the Normal Course of Business?

The union also filed a complaint under section 59 of the Labour Code following the Jonquière store closure. That section essentially prohibits an employer from unilaterally changing the conditions of employment once a union has applied for certification, until bargaining reaches an impasse.

The union was successful in convincing the arbitrator that Wal-Mart's laying-off of its employees constituted a modification of their conditions of employment. To overcome that, Wal-Mart had to prove that the closure decision was made in the normal course of business. But Wal-Mart chose to not divulge information concerning the reasons behind the closure. (See our November 2009 bulletin.)

The arbitrator's decision against Wal-Mart was upheld by Quebec's Superior Court. It stated that Wal-Mart failed in its defense because it had not explained the specific reasons behind the closure of its store.

The parties are now returning to the arbitrator for a ruling regarding the employees' and union's remedies.

In A Wal-Mart Near You

Meanwhile, the ghost of Jonquière still haunts other landscapes. This time, it's 1,500 miles away in Saskatchewan.

The union organizing Wal-Mart's employees in Weyburn, Saskatchewan filed an unfair labour practice charge against Wal-mart with that province's Labour Relations Board ("Board"). In its application, the union contended that Wal-Mart's decision to close its store in Jonquière was intended to intimidate Wal-Mart employees who were attempting to unionize stores in Saskatchewan. Wal-Mart attempted to have the union's application summarily dismissed. It argued the Saskatchewan Board does not have jurisdiction to inquire into the Company's conduct in Quebec.

The Board rejected Wal-Mart's argument. It said that the real issue was not the closure of the Jonquière store but the alleged intimidation of employees in Saskatchewan. Actions committed in Quebec could amount to unfair labour practices towards employees in another province. With only the union's allegations at hand at this stage of the proceedings, the Board concluded that it had jurisdiction to hear the matter.

That ruling was appealed to the Saskatchewan Court of Appeal. The court found that it was premature for it to intervene at this stage of the Board's proceedings. Evidence concerning the union's allegations had not yet been presented. According to the appeal court, Wal-Mart could seek judicial review later, once the final decision is issued. Such a challenge might still include a challenge regarding the Board's jurisdiction.

Lessons for Employers

The Quebec case confirms that employers there cannot be obligated to keep their establishments open. But there can be adverse consequences, depending on the reasons for the closure. Quebec Courts may now seek to punish employers who close up shop for anti-union reasons.

Furthermore, employers across Canada will want to watch the developments of the Saskatchewan case. How far afield can one look for evidence of an attempt to threaten or intimidate employees who wish to unionize?

The big question that employers will definitely want answered is whether or not actions in another province or territory can constitute intimidation of employees seeking unionization in their home province.