United Food and Commercial Workers, Local 503 v. Wal‑Mart Canada Corp.

United Food and Commercial Workers, Local 503 v. Wal‑Mart Canada Corp.
Collection
Supreme Court Judgments
Date
2014-06-27
Neutral citation
2014 SCC 45
Report
[2014] 2 SCR 323
Case number
34920
Judges
McLachlin, Beverley; LeBel, Louis; Abella, Rosalie Silberman; Rothstein, Marshall; Cromwell, Thomas Albert; Karakatsanis, Andromache; Wagner, Richard
On appeal from
Quebec
Subjects
Labour law
Notes
SCC Case Information: 34920
Decision Content
SUPREME COURT OF CANADA
Citation: United Food and Commercial Workers, Local 503 v. Wal‑Mart Canada Corp., 2014 SCC 45, [2014] 2 S.C.R. 323
Date: 20140627
Docket: 34920
Between:
United Food and Commercial Workers, Local 503
Appellant
and
Wal-Mart Canada Corporation
Respondent
- and -
Conseil du patronat du Québec inc., Alliance of Manufacturers & Exporters Canada,
also known as Canadian Manufacturers & Exporters, Canadian Association of
Counsel to Employers and Confédération des syndicats nationaux
Interveners
Official English Translation: Reasons of LeBel J.
Coram: McLachlin C.J. and LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner JJ.
Reasons for Judgment:
(paras. 1 to 98)
Joint Dissenting Reasons:
(paras. 99 to 142)
LeBel J. (McLachlin C.J. and Abella, Cromwell and Karakatsanis JJ. concurring)
Rothstein and Wagner JJ.
u.f.c.w., local 503 v. wal-mart, 2014 SCC 45, [2014] 2 S.C.R. 323
United Food and Commercial Workers, Local 503 Appellant
v.
Wal-Mart Canada Corp. Respondent
and
Conseil du patronat du Québec inc.,
Alliance of Manufacturers & Exporters Canada,
also known as Canadian Manufacturers & Exporters,
Canadian Association of Counsel to Employers and
Confédération des syndicats nationaux Interveners
Indexed as: United Food and Commercial Workers, Local 503 v. Wal-Mart Canada Corp.
2014 SCC 45
File No.: 34920.
2013: December 6; 2014: June 27.
Present: McLachlin C.J. and LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner JJ.
on appeal from the court of appeal for quebec
Labour relations — Certification — Maintenance of conditions of employment — Collective dismissal — Arbitration — Union certified to represent employees — Negotiations to conclude first collective agreement with employer unsuccessful — Employer announcing closure of business — Union filing grievance alleging that dismissal of employees constituted unilateral change in conditions of employment that is prohibited by s. 59 of Quebec Labour Code — Whether s. 59 can be used to challenge resiliation of contracts of employment of all employees of establishment — If so, whether arbitrator rendered unreasonable award in concluding that, in this case, resiliations constituted unlawful change in conditions of employment — Labour Code, CQLR, c. C-27, ss. 59, 100.12.
Wal-Mart opened its Jonquière establishment in 2001. In August 2004, the Commission des relations du travail certified United Food and Commercial Workers, Local 503 (“the Union”) as the bargaining agent for the employees working at the establishment. In the months that followed, Wal-Mart and the Union met several times to negotiate the terms of a first collective agreement. These meetings proved to be unsuccessful, and on February 2, 2005, the Union applied to the Minister of Labour to appoint an arbitrator to settle the dispute that remained between the parties. One week later, Wal-Mart informed the Minister of Employment and Social Solidarity that it intended to resiliate the contracts of employment of all the approximately 200 employees who worked in its Jonquière establishment “for business reasons” on May 6 of that year. After breaking the news to its employees, the business actually closed its doors earlier than planned, on April 29, 2005. Believing that the decision was based on anti-union considerations, the employees and their union brought a series of proceedings against their former employer. In most of these proceedings, the result favoured Wal-Mart.
On March 23, 2005, the Union submitted the grievance at issue in this appeal. It alleged that the dismissal of the employees constituted a change in their conditions of employment that violated s. 59 of the Labour Code (“Code”), which provides that, from the filing of a petition for certification, an employer may not change its employees’ conditions of employment while the collective agreement is being negotiated without the written consent of the certified association. Since Wal-Mart had not proved that its decision to dismiss was made in the ordinary course of its business, the arbitrator concluded that the resiliation of the contracts of employment of all the employees constituted a unilateral change that was prohibited by s. 59. His award was affirmed by the Superior Court, but overturned by the Court of Appeal. The judges of the Court of Appeal, although divided on how broadly s. 59 should be construed, agreed that the section did not apply in the circumstances of the case before them.
Held (Rothstein and Wagner JJ. dissenting): The appeal should be allowed and the case remanded to the arbitrator to determine the appropriate remedy in accordance with the disposition of his award.
Per McLachlin C.J. and LeBel, Abella, Cromwell and Karakatsanis JJ.: The true function of s. 59 of the Code is to foster the exercise of the right of association. Its purpose in circumscribing the employer’s powers is not merely to strike a balance or maintain the status quo during the negotiation of a collective agreement, but is more precisely to facilitate certification and ensure that the parties bargain in good faith. The “freeze” on conditions of employment codified by s. 59 limits any influence the employer might have on the association-forming process, eases the concerns of employees who actively exercise their rights, and facilitates the development of what will eventually become the labour relations framework for the business.
Since s. 59 is not directly concerned with the punishment of anti-union conduct, the prohibition for which it provides will apply regardless of whether it is proven that the employer’s decision was motivated by anti-union animus. It is the union representing the employees that must prove that a unilateral change in working conditions has been made for the purposes of s. 59. To discharge this burden, the union must show: (1) that a condition of employment existed on the day the petition for certification was filed or a previous collective agreement expired; (2) that the condition was changed without its consent; and (3) that the change was made during the prohibition period. The “condition of employment” concept is a flexible one that encompasses anything having to do with the employment relationship on either an individual or a collective level. The right to maintenance of the employment relationship is the basis for a condition of employment for employees, although that condition is nevertheless subject to the employer’s exercise of its management power. Unlike s. 17 of the Code, s. 59 does not create a presumption of change or automatically reverse the burden of proof. The union must adduce sufficient evidence to prove that the alleged change is inconsistent with the employer’s normal management practices. However, nothing prevents the arbitrator hearing the complaint from drawing presumptions of fact from the whole of the evidence presented before him or her in accordance with the general rules of the law of civil evidence as normally applied. As a result, if the union submits evidence from which the arbitrator can infer that a specific change does not seem to be consistent with the employer’s normal management practices, a failure by the employer to adduce evidence to the contrary is likely to have an adverse effect on its case. A change can be found to be consistent with the employer’s “normal management policy” if (1) it is consistent with the employer’s past management practices or, failing that, (2) it is consistent with the decision that a reasonable employer would have made in the same circumstances. The arbitrator must be satisfied that those circumstances exist and that they are genuine.
In the case of a complaint under s. 59, s. 100.12 of the Code and art. 1590 of the Civil Code of Québec confer broad remedial powers on the arbitrator. An arbitrator can order reparation in kind, but where the circumstances do not lend themselves to such a remedy, he or she can order reparation by equivalence. The latter remedy will be appropriate where the employer goes out of business either in part or completely, at least insofar as it is impossible to reinstate the employees dismissed in contravention of s. 59. Unlike s. 15 of the Code, s. 59 contains no word or language that would support a conclusion that its applicability depends on the existence of an active business or, more simply, of a possibility of reinstatement. Plourde v. Wal-Mart Canada Corp., 2009 SCC 54, [2009] 3 S.C.R. 465, therefore cannot support the conclusion that the closure of a business rules out any possibility of applying s. 59 of the Code. In the instant case, there is nothing to preclude the arbitrator from ordering an alternative remedy in the form of damages.
An arbitrator, who is required by law to decide any complaint based on s. 59 of the Code, has considerable discretion in doing so that the ordinary courts must respect. Deference is in order, and judicial review will be available only if the award was unreasonable. In this case, the arbitrator’s award is clearly one of the possible, acceptable outcomes which are defensible in respect of the facts and law. The arbitrator was right to decide that invoking the closure of the Jonquière establishment did not on its own suffice to justify the change for the purposes of s. 59. He did not place an inappropriate burden of proof on the employer. His statement that Wal-Mart had not shown the closure to have been made in the ordinary course of the company’s business was grounded in his view that the Union had already presented sufficient evidence to satisfy him that the change was not consistent with the employer’s past management practices or with those of a reasonable employer in the same circumstances. 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. These inferences of fact, which Wal-Mart did not challenge, led the arbitrator to hold that the resiliation of the contracts of employment and, therefore, the change in the conditions of employment of all the establishment’s employees violated s. 59. This conclusion was reasonable in light of the facts and the law.
Per Rothstein and Wagner JJ. (dissenting): Section 59 of the Code does not apply in situations involving the complete and permanent closure of a business. As this Court stated in Plourde v. Wal-Mart Canada Corp., the recourse available in such circumstances lies under ss. 12 to 14 of the Code.
Section 59 cannot apply to Wal-Mart’s genuine and definitive closure of its Jonquière store because it would require Wal-Mart to justify its decision to close the store, which is inconsistent with the employer’s right, under Quebec law, to close its business for any reason. The sole requirement is that the business closure be genuine and definitive. Once an employer exercises its right to close up shop, then s. 59 of the Code cannot impose an additional ex post facto justification requirement simply because this closure gives rise to a secondary effect — the collective termination of employees. A store closure, by definition, does not conform to previous business practices. If s. 59 were to apply to a situation of store closure, the result would be that businesses could never prove a store closure was business as usual. It would also mean that the employer would be prevented from exercising its right to close its business during the s. 59 freeze period and yet could, immediately upon the conclusion of a collective agreement, the exercise of the right of lock out or strike, or the issuance of an arbitration award, close its business for any reason. Legislation cannot be interpreted to give rise to such absurd results. To apply s. 59 to business closure situations would also undermine the Code’s assignment of the burden of proof and thereby disrupt the Code’s internal coherence. Under ss. 12 to 14, the claimant must prove that anti-union animus motivated the store closure. Contrarily, under s. 59, the employer would bear the burden of justifying the store closure under the “business as usual” rule.
The text and context of s. 59 of the Code also indicate that it cannot apply to a business closure situation because it presupposes the existence of an ongoing business. Section 59 is designed to facilitate the conclusion of a collective agreement within an existing employment relationship; it is not designed to maintain the employment relationship.
Finally, s. 59 cannot apply in the context of a business closure as there is no appropriate remedy available to the arbitrator. Where there is a breach of s. 59, then, the arbitrator must provide a remedy that restores the status quo ante. Since employers in Quebec have the right to close their business, an arbitrator cannot order an employer to reopen a store. While it is true that an arbitrator has the power to award damages under s. 100.12 of the Code, such a remedy would be inconsistent with the purpose of s. 59, since it would not restore the balance between the parties or facilitate the conclusion of a collective agreement. Arbitrators may award damages to compensate for harm that cannot be compensated for by an award in kind. Wal-Mart has already compensated employees of the Jonquière store for the loss of their jobs by paying them severance pay in an amount equal to two weeks of work per year of service. Since s. 59 does not apply to the business closure situation, it gives rise to no additional financial consequences for Wal-Mart.
Cases Cited
By LeBel J.
Distinguished: Plourde v. Wal-Mart Canada Corp., 2009 SCC 54, [2009] 3 S.C.R. 465; referred to: Boutin v. Wal-Mart Canada inc., 2005 QCCRT 225 (CanLII); Boutin v. Wal-Mart Canada inc., 2005 QCCRT 269 (CanLII), aff’d 2005 QCCRT 385 (CanLII), aff’d 2007 QCCS 3797 (CanLII); Pednault v. Compagnie Wal-Mart du Canada, 2005 CanLII 41037, aff’d 2006 QCCA 666, [2006] R.J.Q. 1266; Plourde v. Compagnie Wal-Mart du Canada, 2006 QCCRT 207 (CanLII), aff’d 2007 QCCS 3165 (CanLII), aff’d 2007 QCCA 1210 (CanLII), aff’d 2009 SCC 54, [2009] 3 S.C.R. 465; Desbiens v. Wal-Mart Canada Corp., 2009 SCC 55, [2009] 3 S.C.R. 540; I.A.T.S.E., Stage Local 56 v. Société de la Place des Arts de Montréal, 2004 SCC 2, [2004] 1 S.C.R. 43; Travailleurs et travailleuses unis de l’alimentation et du commerce, section locale 503 v. Compagnie Wal-Mart du Canada — Établissement de Jonquière, [2006] R.J.D.T. 1665; Travailleurs et travailleuses unis de l’alimentation et du commerce, section locale 503 v. Ménard, 2007 QCCS 5704, [2008] R.J.D.T. 138; La Reine v. Harricana Metal Inc., [1970] T.T. 97; Club coopératif de consommation d’Amos v. Union des employés de commerce, section locale 508, [1985] AZ-85141201; Association des juristes de l’État v. Commission des valeurs mobilières du Québec, [2003] R.J.D.T. 579; Coopérative étudiante Laval v. Syndicat des travailleurs(euses) de la coopérative étudiante Laval, [1984] AZ-84141225; Association du personnel administratif et professionnel de l’Université Laval (APAPUL) v. Syndicat des employés de l’Université Laval (SCFP), section locale 2500, [1985] AZ-85142069; Plastalène Corp. v. Syndicat des salariés de Plastalène (C.S.D.), [1990] AZ-90141158; Union des routiers, brasseries, liqueurs douces & ouvriers de diverses industries (Teamsters, Local 1999) v. Quality Goods I.M.D. Inc., [1990] AZ-90141179; Syndicat des salarié-e-s de la Guilde des musiciens du Québec v. Guilde des musiciens du Québec, [1998] AZ-98141137, aff’d 2001 CanLII 38640; Travailleurs et travailleuses de l’alimentation et du commerce, section locale 501 v. Wal-Mart Canada (St-Hyacinthe), [2010] AZ-50688504; Syndicat des employé-es de SPC Automation (CSN) v. SPC Automation Inc., [1994] T.A. 718; Société des casinos du Québec inc. v. Syndicat des employé(e)s de la Société des casinos du Québec, [1996] AZ-96142008; Sobey’s inc. (No 650) v. Syndicat des travailleurs et travailleuses de Sobey’s de Baie-Comeau (CSN), [1996] AZ-96141261; Association des juristes de l’État v. Conseil du Trésor, 1999 CanLII 5144; Centre de la petite enfance Casse-Noisette inc. v. Syndicat des travailleuses(eurs) en garderie de Montréal — CSN, [2000] R.J.D.T. 1859; Syndicat catholique des employés de magasins de Québec Inc. v. Compagnie Paquet Ltée., [1959] S.C.R. 206; Syndicat des travailleurs et des travailleuses des épiciers unis Métro-Richelieu (C.S.N.) v. Lefebvre, 1996 CanLII 5705; Automobiles Canbec inc. v. Hamelin, 1998 CanLII 12602; Séminaire de la Très Sainte-Trinité v. Tremblay, [1991] R.J.Q. 428; Pakenham v. Union des vendeurs d’automobiles et employés auxiliaires, section locale 1974, UFCW, [1983] T.T. 189; Union des employés de commerce, local 500 v. Provost inc., [1981] S.A.G. 732; Scierie Béarn v. Syndicat des employés(es) de bureau Scierie Béarn, [1988] AZ-88141194; Syndicat des employés de la Commission scolaire du Haut St-Maurice v. Rondeau, [1993] R.J.Q. 65; Union des employé-e-s de service, local 800 v. 2162-5199 Québec Inc., [1994] T.A. 16; Reference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313; Delisle v. Canada (Deputy Attorney General), [1999] 2 S.C.R. 989; U.F.C.W., Local 1518 v. KMart Canada Ltd., [1999] 2 S.C.R. 1083; Isidore Garon ltée v. Tremblay, 2006 SCC 2, [2006] 1 S.C.R. 27; Syndicat des salariés des Industries Leclerc (CSD) v. 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Spar Professional and Allied Technical Employees Association, [1979] 1 C.L.R.B.R. 61; Metropol-Basefort Security Group Ltd. (1990), 79 di 139; Bizeau v. Aéroport de Québec Inc., 2004 CIRB 261 (CanLII); Public Service Alliance of Canada v. Hamlet of Kugaaruk, 2010 CIRB 554 (CanLII); Syndicat canadien de la Fonction publique, section locale 1450 v. Journal de Québec, division de Groupe Québécor inc., [1996] R.J.Q. 299; Sobey’s inc., No 650 v. Syndicat des travailleurs et travailleuses de Sobey’s de Baie-Comeau, [1996] T.A. 721; Université McGill v. Munaca, [2003] AZ-50193382, aff’d [2004] AZ-50264810; Alberta Union of Provincial Employees v. Lethbridge Community College, 2004 SCC 28, [2004] 1 S.C.R. 727; Hôpital St-Charles de Joliette v. Syndicat des employés d’hôpitaux de Joliette inc., [1973] R.D.T. 129; Association des pompiers de Montréal inc. (APM) v. Montréal (Ville de), 2011 QCCA 631 (CanLII); Travelways Ltd. v. Legendre, [1987] AZ-87149123; Natrel inc. v. Syndicat démocratique des distributeurs (CSD), [2000] R.J.D.T. 670; Canada (Attorney General) v. Bedford, 2013 SCC 72, [2013] 3 S.C.R. 1101; Ontario (Attorney General) v. Fraser, 2011 SCC 20, [2011] 2 S.C.R. 3; City Buick Pontiac (Montréal) Inc. v. Roy, [1981] T.T. 22; Blanchard v. Control Data Canada Ltd., [1984] 2 S.C.R. 476; St. Anne Nackawic Pulp & Paper Co. v. Canadian Paper Workers Union, Local 219, [1986] 1 S.C.R. 704; Dayco (Canada) Ltd. v. CAW-Canada, [1993] 2 S.C.R. 230; Ivanhoe inc. v. UFCW, Local 500, 2001 SCC 47, [2001] 2 S.C.R. 565; Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42, [2003] 2 S.C.R. 157; Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708; Olymel, s.e.c. v. Syndicat des travailleurs d’Olympia (CSN), 2007 QCCA 865 (CanLII); Syndicat des employés de Daily Freight (CSN) v. 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By Rothstein and Wagner JJ. (dissenting)
Plourde v. Wal-Mart Canada Corp., 2009 SCC 54, [2009] 3 S.C.R. 465; Desbiens v. Wal-Mart Canada Corp., 2009 SCC 55, [2009] 3 S.C.R. 540; Boutin v. Wal-Mart Canada inc., 2005 QCCRT 225 (CanLII); Boutin v. Wal-Mart Canada inc., 2005 QCCRT 269 (CanLII); Pednault v. Compagnie Wal-Mart du Canada, 2006 QCCA 666, [2006] R.J.Q. 1266; Automobiles Canbec inc. v. Hamelin, 1998 CanLII 12602; Union des routiers, brasseries, liqueurs douces & ouvriers de diverses industries (Teamsters, Local 1999) v. Quality Goods I.M.D. Inc., [1990] AZ-90141179; Canada v. Craig, 2012 SCC 43, [2012] 2 S.C.R. 489; I.A.T.S.E., Stage Local 56 v. Société de la Place des Arts de Montréal, 2004 SCC 2, [2004] 1 S.C.R. 43; City Buick Pontiac (Montréal) Inc. v. Roy, [1981] T.T. 22; Syndicat des employé-es de SPC Automation (CSN) v. SPC Automation Inc., [1994] T.A. 718; Mont-Laurier (Ville de) v. Syndicat des professionnels et professionnelles de la Ville de Mont-Laurier (CSN), 1995 CanLII 1874; Conseil conjoint du Québec, Syndicat du vêtement, du textile et autres industries, local 2625 v. Société en commandite Greb International (Division Kodiak), [1999] AZ-99141036; Association des juristes de l’État v. Conseil du Trésor, 1999 CanLII 5144; Pakenham v. Union des vendeurs d’automobiles et employés auxiliaires, section locale 1974, UFCW, [1983] T.T. 189; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048.
Statutes and Regulations Cited
Act respecting labour standards, CQLR, c. N-1.1, ss. 82, 124.
Act to amend the Labour Code and the Labour and Manpower Department Act, S.Q. 1977, c. 41, s. 48.
Act to constitute a Labour Relations Board, S.Q. 1944, c. 30.
Charter of human rights and freedoms, CQLR, c. C-12.
Civil Code of Québec, arts. 1375, 1434, 1458, 1590, 1607, 2091, 2094, 2846, 2849.
Interpretation Act, CQLR, c. I-16, s. 41.
Labour Code, CQLR, c. C-27, ss. 12, 14, 15 to 19, 58, 59, 93.1, 100.10, 100.12, 114, 139, 139.1, 140.
Labour Code, R.S.Q. 1964, c. 141.
Labour Relations Act, R.S.Q. 1941, c. 162A, s. 24(1).
National Labor Relations Act, 49 Stat. 449 (1935).
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APPEAL from a judgment of the Quebec Court of Appeal (Vézina, Léger and Gagnon JJ.A.), 2012 QCCA 903, [2012] R.J.Q. 978, [2012] R.J.D.T. 387, [2012] AZ-50856639, [2012] J.Q. no 4538 (QL), 2012 CarswellQue 4819, setting aside a decision of Moulin J., 2010 QCCS 4743, [2010] R.J.D.T. 1118, [2010] AZ-50678295, [2010] J.Q. no 10112 (QL), 2010 CarswellQue 10570, dismissing an application for judicial review of an arbitral award, [2009] R.J.D.T. 1439. Appeal allowed, Rothstein and Wagner JJ. dissenting.
Claude Leblanc, Bernard Philion, Gilles Grenier and Stéphanie Lindsay, for the appellant.
Corrado De Stefano, Frédéric Massé, Danny Kaufer and Louis Leclerc, for the respondent.
Ronald J. McRobie, Dominique Monet and Guy-François Lamy, for the intervener Conseil du patronat du Québec inc.
George Avraam, Mark Mendl and Cherrine Chow, for the intervener the Alliance of Manufacturers & Exporters Canada.
Stephen F. Penney and Jeffrey W. Beedell, for the intervener the Canadian Association of Counsel to Employers.
Éric Lévesque, Isabelle Lanson and Karim Lebnan, for the intervener Confédération des syndicats nationaux.
English version of the judgment of McLachlin C.J. and LeBel, Abella, Cromwell and Karakatsanis JJ. delivered by
LeBel J. —
I. Introduction
[1] On April 29, 2005, Wal-Mart Canada Corp. (“Wal-Mart”) closed its store in Jonquière in the Saguenay–Lac-Saint-Jean region. The closure, which had been announced the day an arbitrator was appointed to resolve an impasse in negotiations for a first collective agreement with the union certified for that establishment, led to a series of proceedings based on various sections of the Labour Code, CQLR, c. C-27 (“Code”), and the Act respecting labour standards, CQLR, c. N-1.1 (“A.L.S.”). This appeal, the final chapter in this long legal battle, concerns the interpretation of the first paragraph of s. 59 of the Code, which reads as follows:
From the filing of a petition for certification and until the right to lock out or to strike is exercised or an arbitration award is handed down, 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.
[2] On being asked to determine whether that provision applied in the context of the closure of the Jonquière establishment, arbitrator Jean-Guy Ménard concluded that the resiliation of the contracts of employment of all the employees of that establishment constituted a prohibited unilateral change. His award was affirmed by the Superior Court, but overturned by the Court of Appeal. The judges of the Court of Appeal, although divided on how broadly s. 59 should be construed, agreed that the section did not apply in the circumstances of the case before them.
[3] In my opinion, the Court of Appeal erred in intervening as it did. Arbitrator Ménard’s analysis and the conclusions he drew are not unreasonable. On the contrary, it seems to me that the prohibition provided for in s. 59 of the Code is indeed applicable to the facts of this case. I would accordingly allow the appeal, dismiss the application for judicial review and declare the arbitration award, and its disposition, to be valid.
II. Origins and History of Litigation Between Wal-Mart and the Union
[4] Wal-Mart opened its Jonquière establishment in 2001. Three years later, in August 2004, the Commission des relations du travail (“Commission”) certified United Food and Commercial Workers, Local 503 (“the Union”) as the bargaining agent for the employees working at the establishment. In the months that followed, Wal-Mart and the Union met approximately 10 times to negotiate the terms of what would in normal circumstances have become the first collective agreement between the parties.
[5] These meetings proved to be unsuccessful, and the Union therefore availed itself of the option of first agreement arbitration under s. 93.1 of the Code on February 2, 2005, applying to the Minister of Labour to appoint an arbitrator to “settle the dispute” that remained between the parties. One week later, Wal-Mart informed the Minister of Employment and Social Solidarity that it intended to close its Jonquière establishment on May 6 of that year and that, on the same date, it would be resiliating the contracts of employment of all the employees who worked there. After breaking the news to its employees, the business actually closed its doors earlier than planned, on April 29, 2005. Nearly 200 employees lost their jobs.
[6] Believing that the decision was based on anti-union considerations, the employees and their union brought a series of proceedings against their former employer. On March 23, 2005, before the establishment had even closed, the Union submitted the grievance at issue in this appeal. The next day, the Union and several employees applied to the Commission for an interlocutory and permanent order enjoining the company to keep its Jonquière establishment open. The following month, one of the employees, Alain Pednault, applied to the Superior Court for authorization to institute a class action against his employer, arguing, inter alia, that the employer had violated various rights protected by the Code and the Charter of human rights and freedoms, CQLR, c. C-12. Finally, a few weeks after the establishment closed, a group of employees that included Gaétan Plourde filed a series of complaints with the Commission under ss. 15 to 19 of the Code, which prohibit dismissals and other actions taken in response to employees’ union activities.
[7] In most of these proceedings, the result favoured Wal-Mart. First, the Commission dismissed the application for an order enjoining the company to keep its Jonquière establishment open, holding that no prima facie case had been made out (Boutin v. Wal-Mart Canada inc., 2005 QCCRT 225 (CanLII); 2005 QCCRT 269 (CanLII), aff’d 2005 QCCRT 385 (CanLII), and 2007 QCCS 3797 (CanLII)). Next, the Superior Court dismissed Mr. Pednault’s application for authorization to institute a class action. It found, and the Court of Appeal agreed, that the Commission had exclusive jurisdiction over the subject matter of the proposed action (Pednault v. Compagnie Wal-Mart du Canada, 2005 CanLII 41037 (Que. Sup. Ct.), aff’d 2006 QCCA 666, [2006] R.J.Q. 1266).
[8] Finally, the complaints in which Mr. Plourde and his coworkers alleged a violation of ss. 15 to 19 of the Code were ultimately rejected by a majority of this Court (Plourde v. Wal-Mart Canada Corp., 2006 QCCRT 207 (CanLII), aff’d 2007 QCCS 3165 (CanLII), 2007 QCCA 1210 (CanLII), and 2009 SCC 54, [2009] 3 S.C.R. 465; Desbiens v. Wal-Mart Canada Corp., 2009 SCC 55, [2009] 3 S.C.R. 540). In that first case, Mr. Plourde argued that he, together with other employees, had been dismissed for his union activities. Relying on ss. 15 to 19 of the Code, he sought to be reinstated in his job. The Court’s answer, which was purely procedural (para. 4), was essentially based on the language of s. 15.
[9] The majority of this Court found that the language of that section is clear: the course open to the Commission is to order that an unlawfully dismissed worker be reinstated “in his employment” (see paras. 35-36, 39 and 54). Given that it lacks the power to award damages as an alternative remedy (paras. 36 and 39), the Commission, which cannot order an offending employer to keep running its business, simply has no way to ensure respect for the rights of dismissed employees. Even if it did have such a power, however, on the basis of I.A.T.S.E., Stage Local 56 v. Société de la Place des Arts de Montréal, 2004 SCC 2, [2004] 1 S.C.R. 43, closure would be a “good and sufficient reason” for dismissal within the meaning of s. 17 (paras. 41 et seq.) and, as such, would in practice constitute a complete answer for an employer against which a complaint has been filed under ss. 15 to 19 of the Code.
[10] Having determined that the s. 15 scheme was inapplicable, the majority added that the closure of an establishment does not shield an employer from all the consequences of its decision (paras. 8, 51-52 and 54). Quite the contrary, given that there are other sections under which a claim for compensation might lie. In the case at bar, the employees are arguing that s. 59 is one such section.
III. Procedural History of the Appeal
A. Preliminary Decisions Concerning the Grievance Arbitrator’s Subject-Matter Jurisdiction
[11] The grievance at issue in this appeal was initially dismissed at a preliminary stage on the basis that the arbitrator lacked jurisdiction over the subject matter (Travailleurs et travailleuses unis de l’alimentation et du commerce, section locale 503 v. Compagnie Wal-Mart du Canada — Établissement de Jonquière, [2006] R.J.D.T. 1665 (T.A.) (Jean-Guy Ménard)). After analyzing the wording of the complaint, Arbitrator Ménard found that it was [translation] “fundamentally concerned” with alleged violations of rights established in the Code (paras. 18-22). As a result, s. 114 of the Code left him with no choice but to decline jurisdiction in favour of the Commission.
[12] However, that decision was reviewed by the Superior Court a few months later (Travailleurs et travailleuses unis de l’alimentation et du commerce, section locale 503 v. Ménard, 2007 QCCS 5704, [2008] R.J.D.T. 138). Applying the correctness standard, Taschereau J. noted that the arbitrator should have determined the true subject matter of the complaint rather than relying on its words alone (paras. 42-43). In the absence of evidence to the contrary, [translation] “one could not find on the basis of the words . . . that the arbitrator lacked jurisdiction” (para. 44). On the contrary, he stated, “without hiding behind strict formalism, as the respondent arbitrator did”, it seemed clear that the complaint was based on s. 59 (paras. 44-48). It was in fact up to the arbitrator to rule on the complaint, although he might have to reconsider his jurisdiction in light of the evidence adduced (paras. 49-51).
B. Grievance Arbitrator’s Award, [2009] R.J.D.T. 1439
[13] Exercising his jurisdiction in this regard, Arbitrator Ménard upheld the Union’s complaint and reserved the right to determine the appropriate remedy.
[14] After considering all the evidence, he found first that the dispute concerned the dismissal of the employees and not, as Wal-Mart suggested, the closure of its establishment (paras. 14-17). This meant that it had to be decided whether a dismissal can violate s. 59 of the Code and whether the dismissal in this case was in fact such a violation.
[15] Relying on the relevant case law, Arbitrator Ménard noted that the purpose of the freeze on conditions of employment imposed by s. 59 is to protect, for a specified period of time, the right to form a union and negotiate a collective agreement. To this end, the section prohibits an employer from changing its employees’ conditions of employment until that period expires. Given that this “freeze” is relative in nature, however, it does not prevent the employer from running its business as it would normally do outside the period specified in the Code. The employer can therefore make any changes it wishes in the management of its workforce, but only if it does so [translation] “in accordance with criteria it established for itself before the arrival of the union in its workplace” (paras. 18-20).
[16] Moreover, he added, it is [translation] “now accepted by judges and authors alike that a layoff or dismissal can result in a change in conditions of employment” (para. 22). As a result, the employer must justify its decision to dismiss “by proving that it was made in the ordinary course of its business” (para. 24). In the absence of some additional explanation by the employer, the fact that the closure of the establishment was a “business decision” within its exclusive authority does not on its own constitute such proof. Although it is always open to an employer to go out of business, the employer must nonetheless explain a decision to do so during the period covered by s. 59. The employer in this case did not do so (paras. 25-29).
C. Superior Court, 2010 QCCS 4743, [2010] R.J.D.T. 1118
[17] On a motion for judicial review, the Superior Court upheld Arbitrator Ménard’s award. To begin, Moulin J. reiterated that the arbitrator had jurisdiction to decide the case. In his opinion, Mr. Ménard’s decision to hear the case was not only reasonable, but also correct in law. In this regard, the fact that the circumstances on which the grievance was based could give rise to various remedies did not deprive the arbitrator of his powers and jurisdiction under s. 59 of the Code (paras. 25-39).
[18] Applying the reasonableness standard, Moulin J. then held that, on the merits, the arbitrator’s award had all the qualities that make a decision reasonable. First, in light of the case law of this Court and of the Court of Appeal, it was not unreasonable to conclude that the dismissal of all the employees of an establishment could constitute a change in their conditions of employment (paras. 47-50). Second, it was just as reasonable to ask an employer challenging the merits of a complaint to show that the change was made in the ordinary course of its business. In the absence of evidenc