(Canadian OH&S News) -- More than nine years after a Walmart store shuttered its doors in response to union certification, the Supreme Court of Canada (SCC) has ruled that the move was improper and turned the case back to the arbitrator to...
(Canadian OH&S News) — More than nine years after a Walmart store shuttered its doors in response to union certification, the Supreme Court of Canada (SCC) has ruled that the move was improper and turned the case back to the arbitrator to determine the appropriate remedy.
In its 5-2 ruling on June 27, the SCC found that the closure of the store in Jonquière, Que., which had been announced the day arbitrator Jean-Guy Ménard was appointed to resolve an impasse in negotiations for a first collective agreement with the union, was illegal and contrary to section 59 of Quebec’s Labour Code. The translated section reads, in part: “No employer may change the conditions of employment of his employees without the written consent of each petitioning association and, where such is the case, certified association.”
Writing for the majority, Justice Louis LeBel noted that “in this context, to find that there has been no unlawful change in conditions of employment within the meaning of s. 59 of the code, an arbitrator must do more than simply determine that the employer had the power to act the way it did before the union’s arrival. He or she must also be satisfied that the employer’s decision was consistent with its normal management practices, or in other words, that it would have done the same thing had there been no petition for certification.”
Walmart closed its store in Jonquière on April 29, 2005, four years after it opened. Less than one year before its closure, Quebec’s Commission des relations du travail had certified Local 503 of the United Food and Commercial Workers Canada (UFCW) union as the bargaining agent for employees working at the establishment. On Feb. 5, 2005, the UFCW applied to the provincial labour minister to appoint an arbitrator to settle a dispute between the parties, the SCC decision read.
One week later, Walmart informed the Minister of Employment and Social Solidarity that it intended to close the Jonquière store on May 6 of that year. After breaking the news to its employees, the business actually closed more than a week earlier. Nearly 200 workers lost their jobs.
In reference to section 59 of the Labour Code, the union argued that not only was it well-established that dismissal could constitute a change in conditions of employment, but the employer had produced no evidence to justify that change. Walmart argued that section 59 presupposed the existence of an ongoing business and when such a business no longer exists, there is no longer an employment relationship or a condition of employment.
LeBel wrote that an employer had to prove that its decision was consistent with normal management practices or that it would have proceeded as it did even if there had been no petition for certification. “Given that going out of business, either in part or completely, is not something that occurs frequently in any company, the arbitrator often has to ask whether a reasonable employer would, in the same circumstances, have closed its establishment.”
LeBel wrote that he accepted Ménard’s finding that the “employer at no time told anyone that it intended to go out of business or that it was experiencing financial difficulties. On the contrary, it indicated that, from a perspective of five years, the store was performing very well and that its objectives were being met.
“It was, in fact, reasonable to find that a reasonable employer would not close an establishment that ‘was performing very well’ and whose ‘objectives were being met’ to such an extent that bonuses were being promised,” LeBel wrote.
Paul Meinema, UFCW’s national president, called the ruling a positive milestone in protecting workers’ rights and one that would likely compel employers to justify their actions if they decided to close a store.
“When a company closes down its business (which it can indeed do), the counter is not reset,” said Claude Leblanc, the lawyer representing the former workers, in a UFCW statement. “For a certain amount of time, the company is obliged to offer an explanation for their decision. Furthermore, as far as employees are concerned, the result is the same whether they are laid off temporarily or dismissed, let go, or in a situation where their workplace is closed down. In any case, they lose their jobs and their working conditions are altered.”